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This post directly relates to the bank reconciliation of the accounts. It does not matter how big or small is your company, matching your accounts to the bank records is a MUST and should be performed weekly or at least monthly. WHY do it The main reason is to ensure that your records are up to 

 In this unit, we will discuss the depreciation of the fixed assets. Let's look at the real example, we bought a laptop and we can approximately estimate its useful life for five years, after which technology develops and we need more features in other words the value of this item is no longer the same as purchased years ago.  In accounting such diminishing of value called "depreciation" charge and every year we deduct an amount we agree in our business.  Question is does this apply to all assets, even intangibles? Yes, the depreciation for tangible and amortization for intangible assets is applied.  How much is this "depreciation charge"? There are two main stream methods of depreciation, accountants use: straight line and reduced balance. Straight line is simple division of  value by number of years we expect the asset to be valuable, or number of useful life years. If the same laptop costed us 1000 pounds, then we deduct 200 each year and in the end of the ye

Purchase order is an initial step towards the purchase invoice. In many small businesses or start up, this step is often skipped, as it is easier to make a purchase directly from a supplier or warehouse. However, once a business grows and demands are increasing, the stock can be replaced with a better purchase ordering system. For example, it can be linked to the diminishing stock of product and automatically added to the purchase order. So having a purchase order system can benefit in streamlined ordering process, but also tracking of the items and budgeting for our cash flow.   The content of a purchase order is similar to the purchase invoice, so it is easier to copy the information into actual invoice once it is approved. What should we include in purchase order? Supplier’s business information Date of order Date of supply/delivery Our Purchase order (PO) reference that is later quoted on the invoice from supplier Items required Unites and prices Total pri