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50% off For Life! Buy Now – QuickBooks Online Plus

50% off For Life! Buy Now – QuickBooks Online Plus

By on Jan 7, 2015

Great offer on QuickBooks Online Plus, a 50% savings on the life of your subscription, and I thought you would want to take advantage of it. To get this offer, just follow these three simple steps: 1. Go to http://www.intuitaccountants.com/offer-qbo-plus-qp-buy/ 2. Go through the sign-up pages and fill in your information. 3. Once you sign up, add me as your accountant. Go to “Your Account” and select “Manage Users.” Then click on the “Invite Accountant” button and fill out my information Let me know if you have any questions about signing up. Talk to you...

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What the Profit and Loss Tells You Part I – COGS

What the Profit and Loss Tells You Part I – COGS

By on Dec 22, 2014

In the Profit and Loss (P&L), also known as the “Income Statement,” the “Cost of Good Sold” (COGS) accounts are typically used for manufacturing, retail businesses, and mainly product-based businesses. In consulting and professional services businesses I use it to separate project-related costs from overhead expenses. The reason I separate these project costs from overhead expenses is because, as I always explain to clients, the COGS (project costs) have an effect on the income the business earns, because you’re either re-billing those hours (subcontractors, cost of labor accounts, etc.) and expenses (reimbursable project costs, equipment rentals, etc.)  and separating them makes it easier to ensure they are re-billed in the income section. These costs are monies you cannot avoid spending in order to produce income. On the other hand, the costs in the Expense section are recurring and do not go away as long as the business is running, regardless of how much the business is “selling” or how much revenue the business is earning. Your rent, utilities, insurance (in most cases), auto expenses, licenses, etc. must be paid no matter the amount of work being “sold” or or the amount of hours worked. Using the COGS section of the Profit and Loss for this purpose gives you the ability to keep track of and get at-a-glance view of project costs (also known as “hard costs”) and whether your projects are profitable or not. The “gross profit” subtotal which represents income minus COGS (project costs) tells you: (1) if it’s positive, your projects have been profitable by that much. If this line is negative, you’re not profiting from your projects and these figures must be looked at in more detail. Even if the gross profit is positive, you still want to look into this figure in more detail. I have found clients money they have not billed by formatting the report this way. If the gross profit is too low and COGS seem out of proportion with sales, something is wrong. Either pricing is too low or some costs have not been re-billed or factored into the total invoice. The “expenses” section to account for overhead (also known as “soft costs”) gives you the ability to keep track and...

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