Accounting Information Really Is Useful- If It Is Understandable!October 9, 2017 - 2 minutes read
CPA firms are notorious for presenting valuable information in the industry language of “accountant-speak,” or in a format whose scarcity or detail clouds the value to the user.
At Price CPAs, we communicate in your language. We convert “accountant speak” into “your speak.”
The pertinent financial information required on which to make key decisions and operate successfully is presented in terminology our clients understand. Our objective is to make sure our clients have accurate financial information on a timely basis. This extends to supporting all phases of an accounting/finance department from bookkeeping to CFO. On our clients’ behalf, we provide their internal accounting department with the expertise, assistance, guidance, and resources they need. This allows our clients to invest their time in what is most important – growing and managing their businesses.
Here is a translation table as you encounter accounting terminology:
Balance Sheet – A financial statement which summarizes a company’s financial position into 3 segments – 1) assets 2) liabilities and 3) equity, which is the net difference between assets and liabilities.
GAAP – Acronym for Generally Accepted Accounting Principles. Simply put, these standards and accounting methods, when followed, produce a uniformity to financial statements, so that the user can rely on them.
Working Capital – Measures short-term financial health by subtracting current liabilities (e.g. accounts payable, accrued expenses, notes payable) from current assets (e.g. cash, accounts receivable, inventory).
Retained Earnings – Also referred to as equity, the accumulated net income/loss of a company, less dividends/distributions paid, since its inception.
EBITDA – Acronym for Earnings Before Interest Taxes Depreciation and Amortization; measures a company’s cash flow before non-cash expenses, taxes, and debt service.
Knowing the language is a start. Communicating in both languages is what matters most. If you would like review your accounting needs with a professional at Price CPAs, we will gladly listen. Then we will explore ways we can be of service to you on a corporate or personal basis. You can reach us through our website (www.pricecpas.com) or call us at 615-385-0686.