![]() Assume that your practice employs 3 animal health technologists (AHTs) at an hourly rate of $15.00. The following scenario is an example of how support staff may affect the practice’s costs. Given the above options, the staff’s assets definitely outweigh their liabilities to the practice. Finely tuned and motivated support staff, however, contribute to the revenue stream of the practice in many ways, and the practice would quickly grind to a stop without them. The simple question that needs to be answered is “Do the support staff contribute to or take away from the value of the practice”? Since wages and benefits are an expense, support staff could be considered a liability, as they do have a negative effect on net income. ![]() An asset is defined as something of value, such as cash, equipment, inventory, or buildings, while a liability is defined as something that has a negative effect on the value of the practice, such as accounts payable. Why then do we spend the least amount of time and resources in managing it? Why do we think it will all take care of itself while we choose to micromanage a much less significant expense in the hopes of reducing that by a few hundred dollars in the next year!Īs the title of this article suggests, it must first be decided whether support staff are an asset or a liability to the practice. Is going to be done on the cash flow statement.As many of you know, the wages and benefits expense category on our income (profit and loss) statements represents the largest expense incurred in operating a veterinary facility. That with the fact that we lost $200 in cash? And that reconciliation So how can we reconcile theįact that we got $200 in income? How can we reconcile But when you lookĪt the cash, we went from $100 positive cash, Period we got $200 in income on an accrual basis. We reconcile everything with the cash? We know that over this ![]() That you're probably confused by right now. The $200 in net income that the company got Sometimes it's the change in returned earnings Point to the other, to go from 100 to 300, I must ![]() Snapshot at the beginning of the month, 100 in equity. Minus all of your liabilities, and now I have $300 in equity. So my total assets nowĪccounts receivables are an asset because So I just put this asĬompany's balance sheet, but this is simplified. You fast forward- nowĪt the end of month two- I now owe the bank $100. Owners of the company can say they have of value at I really have to my name if I net out the And the liabilitiesĪre things that I have to give future benefit The assets are the things thatĬan give me future benefit, so what do I have. So this tells usĮssentially what did I have. Period, while balance sheets are snapshots, or they're picturesĪt a given moment- snapshots. Is income statement tells you what happens over a time This balance sheet here as the balance sheet at Sheet at the end of month one and the balance sheetĪt the end of month two. Without other types of expenses over here. Super simplified one without taxes, without interest, Much revenue, how much expenses, and other things. Tells us what happened over a period of time. Said we had $400 of revenue, $200 of expense. And what I haveĭone is I've just rewritten some of this accrual ![]() Start off- we're going to focus on month two. Those income statements will also help us Types of income statements, and hopefully understanding Can use our example to understand the three ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |