Practical bookkeeping articles for business owners.
Written by Jessica Zhao. Common mistakes, monthly close mechanics, and the software workflows we run with clients.
Why completed change orders often go unbilled on construction jobs
The job was done. The changes were approved. But $7,600 of that work never made it onto the final invoice. Here is how it happens and how to prevent it.
How to reconcile Carta equity records to your general ledger
Your cap table shows 1.4 million options vesting. Your books show zero stock-based compensation expense. Here is what that gap costs at Series A diligence.
What to pay yourself: how the books determine a sustainable owner draw
The checking account balance is not a guide to what you can pay yourself. Here is the calculation that shows what the business can actually support.
Why your multi-channel store can look profitable while one channel loses money
A blended P&L can show solid profit while Amazon, Shopify, or wholesale runs at a loss. Here is how to see what each channel actually earns.
Why a $1.2M contingency pipeline and a $340,000 P&L can both be correct
A contingency firm's books record no revenue until cases settle. A WIP schedule is the only way to know what the open caseload is actually worth.
How much to reserve per rental unit for capital replacements
Setting $60 per door per month without a system-by-system calculation is a guess, not a reserve. Here is how to calculate what your buildings actually need.
Why retainage belongs in its own account, not mixed into accounts receivable
Lumping retainage into regular AR makes the aging report wrong, the cash forecast wrong, and the job cost report hard to close. Here is how to fix the setup.
Why your MCA portfolio looks healthy when recent deals are not
Your aggregate collection rate looks healthy. But older, performing deals may be masking serious problems in deals you funded more recently.
Why your actual food cost never matches the number your recipes say it should
Recipe cards say 28 percent food cost. The books close at 34 percent. The gap has four specific causes. Here is how to find where the food is going.
Why your highest-volume ISO may be your least profitable one
Volume rankings tell you which broker sends the most paper. They do not tell you which broker is actually generating return on the capital you deploy.
Two burn rates, one company: why gross burn and net burn both matter
Your monthly burn looks like $340,000. An investor's model shows $640,000. Both are correct. Here is what each measures and why the gap matters at Series A.
Why your agency made $80,000 last year and three clients are why
An average margin tells you nothing about which clients to keep. Profitability by client is the report that decides who you retain, raise, or fire.
Why your rental's '8 percent return' might really be 4 percent
Investors quote returns based on gross rent and purchase price. The number that matters for real decisions is cash-on-cash return. Here is what gets left out.
How over- and under-billings distort your construction P&L
When you bill by milestone and jobs run for months, the P&L can show strong profit while the bank runs thin. A WIP schedule explains the difference.
How a single CRO invoice wrecks your monthly burn picture
A founder's monthly burn looked steady at $480K. Then a $1.4M CRO invoice hit and the board panicked. The work hadn't actually changed. The bookkeeping had.
Why the contract margin you walked away with isn't the margin in the books
He finished the kitchen, banked the final check, and was confident the job cleared 25 percent. The books showed 8 percent. The books were correct.
Why prime cost is the number that tells you whether a busy week was actually profitable
A packed dining room doesn't mean a profitable week. Prime cost, food plus labor as a share of sales, is the number that tells the real story.
Why your Toast says $8,400 but your bank says $7,612
Your POS sales never match your bank deposit, and that's normal. Here's what is actually in the gap, why it matters, and the weekly ritual that keeps your books honest.
How to Track Profit and Loss by Property in QuickBooks Online
Set up class tracking in QuickBooks Online to see a separate profit and loss report for each rental property. Here is exactly how to do it.
Why your bank balance says one thing and your P&L says another
Your P&L says $40,000 in profit. Your bank has $5,200. The money isn't missing. It's hiding in four places nobody told you about.
Why your Centrex deal book and your QuickBooks disagree by six figures
Your CRM says one number. QuickBooks says another. The difference is $187,000 and nobody can explain it. Here's what's actually causing it.
Why your law firm billed $340,000 and collected $218,000
A litigation firm billed $340,000 and collected $218,000 in one quarter. The gap is not one problem. It is two, and each requires a different fix.
Why your bestseller might be losing money once you count landed cost
You sell it for $50. You paid the supplier $20. That's not a 60 percent margin. Here is what your books are leaving out and why your real margin can be half of what you think.
Why your trust account never ties on the first try
Three numbers that should match. They almost never do on the first pass. Here is what causes the drift, and the half hour a month that keeps the firm in compliance.
How to Reconcile Shopify Payouts in QuickBooks Online
A step-by-step guide to reconciling Shopify payouts in QuickBooks Online so your deposits, sales, fees, and refunds actually tie out every month.