I love organizing data, and offices (and all of my friends closets). Real work is messy; so it's nice to start and end with a clear palette. In this way, one creates a balanced office.
In my own filing system, I can find any piece of paper, from any year, within minutes. In the book, I explain how to create a filing system, even if you're starting with an office disaster. From that core system, you'll modify your filing system according to how you do business, so that you too can find any piece of paper in minutes. This is absolutely doable; I've done it for many clients. Here's one tip: it's rarely necessary to file a singe piece of paper. Put it in a "To Be Filed" folder. When you find yourself with a spare 10 minutes do all the filing.
Rich, after all, is relative -- as the folks at Poke, a creative agency in
, want to remind us. Click on this link: Global Rich List and put in how much you make in a year, rough estimate. Based on World Bank data, this little calculator tells you how rich you are compared to the rest of the world.
Last night I presented Radical Accounting ideas at New Renaissance Bookstore presentation center. Many people, including Roma and Ko, supported this event in practical ways which made me happy. I felt happy preparing the room with refreshments, as well as a table with free stuff including Intuit demo software, and vendors office supply samples. Someday Intuit will provide a demo MAC QuickBooks on CD. You have to download the demo for now.
I've been doing QuickBooks consulting for a decade and I still love it. But teaching is new and fresh. How cool is what we're doing, anyway? A group of twenty entrepreneurs, bookkeepers, CPA's, non-profit managers, and aspiring all-of-the-above, learned, shared our frustrations, networked, ate, drank, and took notes. As a result, everyone gained more control over their financial situation. Accounting classes and books are terribly boring. Talking about money isn't boring, so why should accounting be that way? I bring the joy back into accounting...how radical is thatl!
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New Renaissance Bookstore carries the book, so you can get a copy NOW in Portland.
Labels: accounting presentation
When do you classify an expense as a cost of goods (COGS), and when do you classify it as an expense?"
Mike: Suppose I advertise a product in a magazine or on TV and I hire a company to process the incoming calls from customers wishing to place orders for the product. Should the answering service's fees be considered Cost of Goods sold or general expense? Also, is the cost of advertising COGS or general expense?
Madeline: Cost of goods would be the costs of your product, but not advertising or customer support.
Mike: Okay thanks, but every time the "order-taking company" takes an order over the phone, it costs me $2 or $3. Is COGS always and exclusively the cost of materials needed to produce the product?
Madeline: Actually, I see your point. There's no law that says you can't have it as COGS. It's a marketing expense, but it's a direct cost. I'd call the account, "Sales process fee". That sounds like a direct cost, and a banker would understand it too, don't you think?
Conclusion: Every business owner has different challenges, which is why the book, Radically Simple Accounting, guides you through customizing your chart of accounts for your business.
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