In accounting, we do not depreciate intangible assets such as software and patents. Instead of depreciating such assets, we amortize them which is quite similar to depreciation. But because there are separate accounting rules to consider when applying amortization, most accountants refer to intangible assets as non-depreciable assets. Useful Life and Straight Line Depreciation If the number of years remaining is less than 1, the depreciation rate for that tax year is 1.0 (100%).…

Normally, these funds are used for working capital and fixed asset purchases (capital expenditures) or allotted for paying off debt obligations. Once your cost of goods sold, expenses, and any liabilities are covered, you have to pay out cash dividends to shareholders. The money that’s left after you’ve paid your shareholders is held onto (or “retained”) by the business. Your accounting software will handle this calculation for you when it…

A wide range of financial products all involve a series of payments that are equal and are made at fixed intervals. The two conditions that need to be met are constant payments and a fixed number of periods. For example, $500 to be paid at the end of each of the next five years is a 5-year annuity. The present value of an annuity refers to the current value of…

The right ecommerce automation software can help you reduce the risk of errors from manual data entry across business operations. If you have a staff, give them the tools they need to succeed in implementing the accounting cycle. This could mean providing quarterly training on best practices, meeting with your staff each cycle to find their pain points, or equipping them with the proper accounting tools. The better prepared your…