Advice and answers from the Startegy Team

Startegy uses what is called Managerial Accounting.  It is a type of accounting that is less focused on year-end taxes and more focused on decision making.  Typical accounting software is designed for you to make sure you don't get in trouble with the government and are paying the appropriate taxes.  Larger businesses have accountants on staff that focus on operations, decision-making, and planning the business future. These are often referred to Managerial Accountants. They use the business numbers not to pay taxes, but to run the business as profitable and to keep the business alive and growing.

Managerial Accounting

The most important aspect of Managerial Accounting is that expenses are organized into fixed and variable expenses.  Fixed expenses are those that you seem to always have running your business, like paying rent, utilities or buying office supplies.  Fixed expenses can reoccur each month or may just happen once.
Variable expenses, on the other hand, are directly tied to the sales of your products and services.  If you are a painter and work more hours, typically you will need more paint so your paint is a variable expense.  Put simply, if an expense increases as your sales increase then it is a variable expense. 

Did this answer your question?