In accounting, there are two primary methods—accrual and cash basis. The main difference between accrual vs. cash basis accounting is in how and when you record income and expenses in your books. Each accounting method has advantages and disadvantages, so it’s important to understand their differences before choosing which method you decide to use for […]
Archives for October 2023
Cash Flow vs. Profit: What’s the difference between Profit & Cash Flow?
As a Small Business Owner, understanding the difference between cash flow and profit is crucial for making informed financial decisions. While both are essential metrics for assessing a company’s financial health, they serve distinct purposes and can impact business operations differently. Cash flow refers to the net flow of cash in and out of a […]
What Is Net Income and How is Net Income Calculated? Net Income Formula Explained
Net income is one key metric that you can use to assess your business’s financial health. It’s the bottom line on your income statement, also called a Profit & Loss Statement (P&L), and it tells you how much money you have remaining after deducting your costs and operating expenses from your total Revenue. What Is […]