What is a Customer Deposit When a customer provides cash in advance as a condition of the sale. Typically before the product or service is delivered, but some time before it is produced or available. Accounting for customer deposits is pretty straightforward. The customer deposit is recorded as a credit Read more…
How to calculate CAGR in Excel. Investopedia has a great definition of CAGR: Compound annual growth rate (CAGR) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each Read more…
Building a financial model for a startup doesn’t have to be overly complicated. If you break it down into the 5 key components it will be much more manageable. The 5 Key Components are: Startup expenses These are the expenses incurred by the business before it “goes live” and starts Read more…
What to do when you know there are critical control deficiencies in your business I was working for a global business in a regional finance leadership role. Internal Audit rotates their work so that each entity is reviewed every three years, and it was our turn. The issue was that Read more…
Should they be expensed as incurred on the income statement or capitalized on the balance sheet and amortized? One popular answer is that digital marketing expenses are a form of advertising and should be expensed as incurred. However, if we look at IFRS 15 Revenue, there is a case for Read more…
Sales tax is complicated, more complicated than it needs to be. How about a harmonized sales tax whereby every jurisdiction in the country collects the same rate on the same goods and services? If states want to reallocate among jurisdictions within their borders they are free to do so. Here Read more…
I think the Agile Alliance does a really good job defining Minimum Viable Product which defines it as that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort. The purpose of the MVP is to learn Read more…
Avoid the tendency to over-analyze and explain 100% of the result. Everyone does it… Google the phrase “primarily due to, partially offset by” you will see 10s of millions of search results, many of them from amazing, reputable companies. Folks, you need to get out of the weeds as they Read more…
One rule of thumb when hiring employees in an early-stage startup that the starting salary is 30% below “market” for a similar role with an established company. To compensate for the lower salary, options are offered. The first option grant should compensate for the lower salary and vest over 4 Read more…
When designing a chart of accounts, there are several competing priorities that you need to manage: you need a way to maintain proper accounting records that are compliant with the accounting and tax regulations you need a way to quickly and efficiently enter accounting transactions you need a way to Read more…