Author: bradhanks


Thoughts on growing a business, raising money, getting the word out,
and increasing profits. Plus, ZipBooks news!

  • Accounting Basics Introduction (with Meg and Earl)

    Posted 3 years ago in Bookkeeping
    by Brad Hanks

    Not many business owners open up shop with a deep understanding of accounting principles. Unfortunately, no matter how big your dream is, your business won’t go anywhere with a little bookkeeping knowledge.  We built ZipBooks to bridge that gap. In short, it’s simple to use—and though it’s capable of doing accounting for high-revenue businesses, the […]

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  • IRS Form W-9

    Posted 3 years ago in Taxes
    by Brad Hanks

    Like all IRS forms, filling out a W-9 form is not very interesting. But W-9 forms are a very necessary part of hiring contractors, so we’ll try to make it as painless as possible. So, you may have heard of a W-4. W-4 forms essentially for hiring full-time employees. They verify the identity of potential […]

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  • What do I do if I have an old outstanding check that never got cashed? Can I write it off?

    Posted 3 years ago in
    by Brad Hanks

    It used to be that when you wrote a check to a vendor and they didn’t deposit the check after 180 days, you could just write off the check and debit the money back to your check account. It was a pretty straightforward process. You had a list of outstanding checks that had not been […]

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  • Why do some asset accounts have a credit balance?

    Posted 3 years ago in
    by Brad Hanks

    You usually don’t have a credit balance on asset accounts because by definition that would make them a liability, but there is an asset account specifically designed to carry credit balances. They’re called contra asset accounts. We’ll cover that and the other main reason that asset accounts carry a credit balance: human error. Contra asset […]

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  • What’s the definition of working capital and how would I measure it?

    Posted 3 years ago in
    by Brad Hanks

    Working capital is the amount of current assets you have minus current liabilities at a certain snapshot in time. It’s like the balance sheet report, in that it measures something at a given moment in time instead of a change over a period of time. Working capital is a snapshot of the differences between assets […]

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  • Where do worker compensation insurance costs get reported on the financial statement?

    Posted 3 years ago in
    by Brad Hanks

    If you are wondering where to record the worker compensation insurance costs, you’ve come to the right place. Workers’ compensation insurance costs, also referred to as workers’ comp, appear on the income statement and the balance sheet.Workers’ compensation insurance costs associated with sales and office staff should be reported as an expense, which shows up […]

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  • How do I handle workers’ compensation premiums under accrual accounting?

    Posted 3 years ago in
    by Brad Hanks

    In order to clearly explain how to handle worker compensation premiums under accrual accounting, we’ll work out an example with real numbers. Let’s say that worker’s comp insurance is about 10% of wages and salaries for all employees that work on a factory floor. That might be a little high, but it makes the math […]

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  • What does it mean when a company is window dressing?

    Posted 3 years ago in
    by Brad Hanks

    Window dressing refers to any attempt to manipulate financials to appear more favorable than the underlying business fundamentals would justify. An example of window dressing would be a company sending out a ton of invoices right before the end of financial reporting period, whether or not those invoices have any chance of getting paid. You […]

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  • When would a prepaid insurance asset have a credit balance?

    Posted 3 years ago in
    by Brad Hanks

    There’s a couple of different reasons why a prepaid insurance asset account might have a credit balance. For example, let’s say company insurance has to pay $1,000 every three months. As a result the company decides to debit the prepaid insurance when the amount is paid quarterly. It also prepares an automatic monthly adjusting entry […]

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  • What’s the difference between work-in-process and work-in-progress?

    Posted 3 years ago in
    by Brad Hanks

    Work-in-process means the manufacturer’s inventory that has started the manufacturing process but hasn’t been completely built yet. Work-in-process are the goods that are on the factory floor of the manufacturer. The amount of work-in-process inventory would be reported along with raw materials inventory and finished goods inventory on the manufacturer’s balance sheet as current assets. […]

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