Journal

Taking shortcuts can be costly.Very often I see organization miss-classifying employees out of convenience or ignorance. For example, the office administrator is required to work 25 hours a week. Why not multiply the 25 hours by the amount per hour paid and pay the employee a “salary” every pay period. Even if this is a possibility,…

The income statement is an easy-to-read listing of the money we received from all sources, Cost of Goods Sold, and expenses combined into categories such as office supplies, telephone, or utilities. For the most part it is straight forward. Presenting the reader what kind of income an organization received and on anything the money was…

The balance sheet shows all the things an organization owns (assets) and all the things the organization owes to somebody (liabilities). There is one more category – equity. Equity accounts for ownership of things. For example, retained earnings and designated funds belong to this. I will explain the terms later. All assets must equal all…

The Statement of Cash Flows is a hybrid of Income Statement and Balance Sheet. People find this document to be the easiest to read. Most of us run our own lives base on this principal. The document starts out with the cash your organization has in bank (cash) accounts beginning of the year and then…

Good people turn into narrow-minded bureaucrats. Soon, the room is split into – the ones claiming they want to do ministry and the ones who claim there is not enough money for ministry. Both are right. Ministry cost money. Ministry is also the reason your organization exists. If there is so much rejection presenting your…

Too often, business owner’s eyes glaze over as soon as Financial Statements are presented. Everybody running a business or being on the board of an organization should know at least these three reports and know why they are used. Balance Sheet: In accounting, we consider these accounts as permanent. They don’t reset by the end…

I know it sounds like a silly question.Who cares – right; employees aren’t friends or family. We are all adults and work in a professional environment. It’s tough enough to play nice at home keeping the peace. Still, so often employee dissatisfaction roots within tiny little details. Production tumbles, motivation is out the window and…

It does not matter if you are a multi-billion corporation or a small non-profit. Money is passing through your organization. Without, everything comes to a screeching stop. Board members of any organization should be fluent in financial language. Learning how to read a balance sheet and income statement is as vital as memorizing the mission…