Invoice Factoring Is Your Friend - An Overview for the CPA

While most entrepreneurs are in business to grow, that growth itself is often the greatest cash flow issue they have to deal with, especially during the first five to seven years of business. As a company grows, more and more assets are tied up in working capital as well as plant and/or facility costs. During these early years it is absolutely critical that small business owners have access to both short-term and long-term capital.

The Snowball Effect

According to the Harvard Business Review, it takes 40 to 60 cents on the dollar for the average small business to fund new business growth. That money is needed to fund the things that deplete the cash in any business:

1. Materials and/or Merchandise
2. Labor
3. Accounts Receivable

Want to Free Yourself Up to Focus on Your Business?

If you run your own business, accounting may not always be at the forefront of your mind but it's actually a most important area. Keeping your records up to date is a good practice and means that you won't be worried when tax season rolls around every year. However, if you're busy keeping things going from day to day, you may not find the time to stay on track and this is where bookkeeping services become incredibly useful.

Keep those records up to date

Failing to keep accurate records means you could be opening yourself up to fines and penalties as well as potential investigation by the Inland Revenue. Deciding to work alongside with an accountant who can provide such services will take a huge weight off your mind, allowing you to focus on making money rather than just trying to recall where it all came from.

Transitioning to IFRS: Can It Be Done?

As a global economy becomes reality, implementing International Financial Reporting Standards (IFRS) seems more than a logical move. How could a one-world system be anything but beneficial? On the other hand, is it even a viable option for those countries that lag behind the rest of the world? What are the challenges of transitioning current market accountability to the IFRS? Although it has been a much discussed topic in recent years, uniformity in global markets is complex in nature, even though it may very well be a necessity. There are key components that need to be considered before the process is completed.

Cultural diversity in society is an attribute, but when it comes to assimilating accounting standards worldwide, it creates monumental challenges. The application of reporting transactions from one jurisdiction to another can breed inconsistency. For example, revenue recognition-a real estate property can reflect two very different results. In addition, institutional or legal obstacles can impact loan covenants-specifically, debt versus equity classifications.