Books
The close, the accounts and the statements behind them — how your books are built, and what they are actually telling you.
Cash vs accrual accounting comes down to the balances only accrual keeps
Accrual books hold six balances cash books never record. Each opening figure comes from a document, the first month looks wrong without them, and for 2026 the IRS line that forces the switch sits at $32 million.
Accounts receivable aging report: the oldest column is income you already booked
The aging report is a statement about your books before it is one about your customers. What the total should tie to, what is really sitting in the 90-plus column, and which lines are not receivables at all.
Invoice payment terms: what each one costs you in days of cash
Each term on your invoice has a price in days of your own cash. What net 15, net 30 and 2/10 net 30 each cost, which bucket each puts you in on the aging report, and who owes you interest when they pay late.
Retained earnings on a balance sheet: profit you have already spent
Almost every definition of retained earnings runs through dividends paid to shareholders. If you take draws and have no shareholders, here is what the line is actually counting and what your return calls it.
Balance sheet vs. income statement: the number at the bottom of one is a line on the other
Your income statement's bottom line is not just a result. It is the amount your equity moved on the balance sheet, which is why one miscoded purchase shows up in two places at once.
How much should I pay myself from my LLC? Reserve, floor, draw
Two subtractions decide it: the tax reserve you can read off last year's return, and the cash floor your business has to keep. What is left is the draw, and some months that is nothing.
How to pay yourself as a business owner: where an LLC draw lands in your books
Four tax classifications, four ways of paying yourself, and one fact underneath all of them: a draw comes out of equity, so it never reaches your profit and loss.