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Seeing negative retained earnings on your balance sheet can feel alarming. Many business owners immediately assume the worst, that their company is failing or that bankruptcy is looming. This panic is understandable but often premature. The reality is more nuanced. Negative retained earnings don't automatically signal disaster. In fact, they're completely normal for certain businesses at specific stages of growth. The key is understanding the context behind the numbers and kn

Many small business owners are genuinely surprised when they first discover negative retained earnings on their balance sheet. The reaction is almost always the same: "But I have money in the bank. My customers are paying their invoices. Operations feel steady. How can retained earnings possibly be negative?"This confusion is completely understandable and stems from a common misunderstanding between cash flow and retained earnings. Having cash in the bank today doesn't necess

Seeing negative retained earnings on your balance sheet can be alarming. That red number in the equity section might seem like a sign of failure, but here's the truth: negative retained earnings don't automatically mean your business is doomed. This is one of the most common misconceptions in small business finance. While negative retained earnings require attention, they're often a natural phase for startups, growing companies, or businesses navigating temporary challenges.

To improve cash flow, businesses should invoice promptly, set clear payment terms, automate billing, and monitor receivables effectively....

Keeping books is an important part of running a successful business, especially in Texas, where places like Houston, Dallas, San Antonio,...

The accounting cycle is a must-know process for any business owner if he wants the business to prosper. Learn more by following 6 steps

Your success in business will rest on good record books and solid cash flow. Without good record keeping, it’s impossible to determine...

For small business owners, you have more fires to put out and issues to deal with. Bookkeeping is often seen as one of the most...

In this article, we’ll learn about inventory and the best practices for proper inventory management. Let’s dive in. What is Inventory?...

Accounting is divided into several sections, but for small business owners, there are three types that are necessary to generate financial i

Administrative tasks like law firm billing and invoicing can be tedious and time-consuming and you may be stuck if you don’t implement...

Along with direct materials and direct labor, overheads are also a very important cost element to determine directly to your business’s...