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From Cash to Accrual: How Switching Accounting Methods Transform Business and Improve Financial Clarity
The Motivation for Change: Many small and medium-sized businesses I worked with initially chose cash accounting for its simplicity—recording income when cash was received and expenses when paid. This method worked well in the early stages when operations were straightforward. However, as these businesses grew and took on larger clients with longer payment terms (30,…
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Why Cash Flow is King?
Many business owners focus heavily on profitability, but even profitable businesses can struggle or fail without a steady cash flow. It’s not just about what’s on the balance sheet; it’s about liquidity. What is the Difference Between Cash Flow and Profit? A common misconception is that profit equals cash. However, profit is an accounting concept…
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Understanding the Big Three: Income Statement, Balance Sheet, and Cash Flow Statement
In the world of business finance, three core documents are essential for understanding a company’s financial health: the income statement, balance sheet, and cash flow statement. Each of these financial statements provides unique insights, and together, they form a comprehensive picture that guides business leaders in making informed decisions. Let’s break down these financial statements,…
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3-Statement Financial Models: A Key to Smarter Decisions
In a world where businesses face constant change, making informed decisions is key to growth and success. One of the most powerful tools that companies can leverage to gain a comprehensive understanding of their financial health is the 3-statement financial model. But what exactly is this model, and how can it benefit your business? Let’s…
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What is FP&A, and How Can it Drive Growth for a Business
What is Financial Planning & Analysis (FP&A)? Financial Planning & Analysis (FP&A) is a critical finance function that focuses on budgeting, forecasting, financial reporting, and analyzing a company’s financial performance. It involves the process of preparing the financial statements, analyzing the company’s historical performance, and forecasting future financial outcomes to support strategic decision-making What is…
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Why Regular Financial Health Checks Are Vital for Your Business Success
In the dynamic world of business, maintaining a robust financial foundation is essential for long-term success. Just like regular health check-ups are vital for personal well-being, consistent financial health checks are crucial for the longevity and success of your business. What is a Financial Health Check? A financial health check is a comprehensive review of…
