Category Archives: Financial Fundamentals

What You Need to Know About Financials

  “All financial projections are wrong, by definition. We’re human and we don’t predict the future accurately. So don’t expect accuracy. Go for plausibility, and then follow up with regular plan versus actual analysis, review and revisions. We call that management.” – From one of my posts on Amex OPEN forum Please don’t use financial… Read More »

Six Financial Terms All Business Owners Should Know

Sure, a good argument for teams in business is not having to know finance if you love sales, marketing, or product development. But you’re a business owner. These important terms aren’t that hard to learn and understand. You owe it to yourself and your business. Like it or not, some very common terms including capital,… Read More »

3 Essential Statements/Projections

The six essential financial terms work into three essential statements (for past results) or projections (in business plans or anything referring to the future). A pro-forma statement, by the way, is another way to say projection. TheProfit and Loss (also called Income) includes Sales, Costs and Expenses. The Balance includes Assets, Liabilities, and Capital. And these… Read More »

What’s Accrual Accounting and Why You Care

Your business bookkeeping is going to be either cash basis or accrual. Too bad “cash basis” sounds so simple and attractive, because accrual is way better, and easier to manage too. Cash basis accounting only works right if you absolutely always pay immediately for every business purchase, and you never buy something before you sell it, and all of… Read More »

Financial Projections Tips and Traps

Profit and Loss is Also Called Income The two phrases have the same meaning. An Income Statement, or Projected Income, is exactly the same as a Profit and Loss Statement, or Projected Profit and Loss. Too bad both exist because every time I write about them I always have to clarify. Now you know. Cash… Read More »