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Your employees would be eagerly waiting for some celebration during the holiday season. For small or medium businesses, parties can indeed be a costly affair. So even if you plan an office party, you might cut down on certain things and minimize the cost. However, this may not be a good idea if your party lacks certain elements (the ones that cost more than others like some fine delicacy or drinks, live DJ). Such parties tend to be boring and it would’ve been much better if you didn’t have one instead. In fact, having a good party has many benefits for the organization. Since Christmas is near, you can have a Christmas party for your employees. Here are some of the benefits why you should celebrate Christmas at the office.
Enhances Employee Engagement
One of the reasons to have a Christmas celebration at the office is because it enhances the employee engagement. Parties act as an ice-breaker and employees socialize with each other. Moreover, as people begin to talk to each other it helps to develop a good rapport among the employees. This leads to increasing the morale of the employees. So having a Christmas party has some long-term benefits for your organization.
Wondering what benefits your business will have from giving parties? Well, you are allowed to get some tax free benefits for offering Christmas parties. In fact, the bigger the party the better it is instead of having a small celebration. If you have a Christmas party that is costing more than $100 per employee, then you can claim the taxable benefits for your organization. Such parties are considered to be beyond the privilege point and hence, you get taxable benefits for the same.
Christmas parties are indeed a great way to have fun and break away from the busy work schedule. However, if your business is experiencing cash-flow problems, it is not easy to throw a party. So what do you when you have a limited amount of cash for an office party? You can follow the tips mentioned below.
Have Party at Workplace
Instead of having the Christmas party at an expensive hotel or restaurant, you can have it at your workplace. You can organize a party at the game rooms, the foyers or in the office canteen. This way you do not have to spend on the place of the party.
Have Pot Meals
Christmas is also known for sharing with each other. So, you can ask your employees to get a specific dish for the party and share with among the co-workers. This way your main headache of spending money for the meals can be reduced. You can instead provide your employees with soft drinks and starters and the main course can be managed by your employees.
Assign an Inhouse DJ
In your organization, there should be at least one person who has a good collection of songs and a sound system. Instead of hiring a DJ, find out who that one person is and assign him as your in-house DJ for the Christmas party.
These are some tips that will help you on saving cost when you celebrate Christmas at the office. So the next time when you plan an office party, make note of the above-mentioned points. Increasing employee morale and getting tax free benefits for your organization are some of the advantages when you celebrate Christmas at the office. To know how you can get tax benefits for the same, consult a professional accountant.
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Every business involved in the manufacturing or production of goods should be aware of the break even analysis. With the help of the break even analysis formula, you are able to calculate your break-even point. It is the point at which the total expense equals the total revenue. So, there is no net profit earned or any loss incurred by the business at the break-even point. Let’s take a look at the break even analysis in more detail.
Break Even Analysis
The break even analysis can be presented in form of the number of units or the amount of revenue earned. For any company, there are two types of costs-fixed cost and variable cost. The fixed cost remains fixed for a considerable period of time. As and when the level of production reaches beyond the optimal limit, the fixed would increase. This cost is incurred by the firm even when they are no units produced. Examples include salary to the supervisor, rent, power bills. The firm is liable to pay for these costs irrespective of the level of units produced or not.
Variable cost is the cost incurred in the production of units. The total variable cost varies with a change in the number of units produced. Examples include the cost of raw materials, labor. Break even analysis helps a firm to determine the number of units it needs to produce and sell in order to reach the point of no profit and no loss-the break-even point. Anything that is sold over and above the break-even point contributes to the profitability of the firm.
Break Even Analysis Formula
Let’s understand this concept with the help of an example. Suppose, XYZ Ltd. produces and sells product P at $10. The cost incurred for Product P is $5 each and the total fixed cost amounts to $1,00,000. Now the firm needs to determine the number of units it needs to produce and sell in order to reach the break-even point. Now the break-even point in quantity (units) is given by Total Fixed Cost/Selling Price- Variable Cost (per unit). The difference between the selling price and variable cost is known as contribution for the firm. Therefore, the formula can also be written as Total Fixed Cost/Contribution per unit.
Fixed Cost = $1,00,000
Selling Price per unit = $10
Variable Cost per unit = $5
Therefore, break-even point in quantity = 1,00,000/ 10 – 5
break-even point in quantity = 1,00,000/5
break-even point in quantity = 20,000 units
This means that XYZ Ltd. needs to sell 20,000 units of Product P to reach the break-even point.
To calculate the break-even point in the sales figure, you need to multiply the selling price per unit of Product P by the break-even quantity. That is 20,000 units X $10 (selling price) = $2,00,000. Therefore, XYZ Ltd. needs to sell goods worth $2,00,000 to reach the break-even point.
The break even analysis can also be calculated in terms of total revenue and total cost as shown below.
Break-even is the point at which total revenue equals total cost.
Therefore, Total Revenue = Total Cost
Selling Price x No. of units sold = Variable Cost x No. of units + Total Fixed Cost
Selling Price x No. of units sold - Variable Cost x No. of units = Total Fixed Cost
(Selling Price - Variable Cost) x No. of units = Total Fixed Cost
(Contribution) x No. of units = Total Fixed Cost
No. of units = Total Fixed Cost/ (Contribution)
Therefore, when you calculate your break-even point, it helps you to figure out the right numbers of units before you begin to make profits. This is very useful when it comes to understanding the time frame before you earn profits and accordingly you can adjust your costs. A good understanding of break even analysis can help you to take the right decisions for your day-to-day activities and also control and avoid cash flow mistakes for your firm. To know more about how you can use the break even analysis for your benefit, get in touch with a professional accounting firm in Edmonton.
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When the year comes to an end, things can become a bit complex. Updating your books of accounts, getting ready for filing your taxes, planning for the next financial year and other work related to your business are some of the things that may turn up at the end of the year. As a result, there is every possibility that you might miss out on certain things. Therefore, it is important that you prepare an accounting checklist for the end of the year. This end of the year checklist will make sure that you have completed all the required work for the current financial year and are well prepared for the next financial year. Here are some of the things that you need to have in your accounting checklist for the end of the year.
Check Your Cash Flows
Small businesses usually operate in small volumes and hence, they may face the problem of insufficient cash. As a business owner, you do not want your business activities to stop at the start of the next year due to insufficient cash. Therefore, you need to make sure that you have sufficient cash with you for the upcoming financial year. Moreover, when you check your cash flow statements, you will be able to figure out from where the money is flowing in and going out. Thus, this will give you some idea on where you can cut down on certain costs and ensure that there is a better earning in the next financial year than the current year.
Analyze the Financial Statement
Your finances should be kept in order. Therefore, it is critical to analyze the financial statement before the year ends. The financial statement gives you a clear indication of the financial position of your business. Moreover, you can ask your accountant to prepare the financial ratios that give a better idea than the financial statements on which business areas needs improvement.
For example, if the inventory turnover ratio is low, then it indicates that you have a surplus stock and more money is blocked in the stock. Either you need to increase your sales or reduce the amount of inventory. A low inventory turnover ratio also results in an increase in cost to keep the inventories in good condition.
Check Your Accounts Receivable and Payable
Make sure that you have received the payments due from your debtors for the current year. Similarly, clear your outstanding accounts payable to your creditors. Go through all your invoices and bills that are yet to be paid. If there is anything that needs to be paid, ensure that you pay and start the next year without any outstanding expenses. In the same way, try to get the money that was due for the current year from your debtors instead of delaying it any further.
Go Through Your Customer Report
It is important to go through your customer report before you go forward in the next year. See to it that you have updated all the information in your file. It will help you to know which customer was lost and more importantly why he was lost. This will help you to avoid the mistakes you did in the current year.
Once you have completed the entire accounting checklist for the end of the year, you can start the next year fresh. The end of the year checklist can be used for future planning to set new goals for your business. In fact, a professional accountant in Edmonton would also consult and guide you in preparing a suitable course of action for your business. So, before you enter the new financial year, ensure you follow the above-mentioned points to prepare your year-end checklist.