Thus, locate the space labeled “Accountant” and produce the legal name of the Accountant being commissioned. You must solidify this entity’s identity by producing his or her mailing address across the next three empty lines. The Client who intends to hire the Accountant named above through this paperwork must have his or her full name supplied on the blank line labeled “Client.” His or her mailing address should also be supplied here.

• This method is the best way to keep track of asset and liability accounts.
• You’ll want to consider the bookkeepers’ expertise level, types of services they offer, technology integration offerings, and what industries or niches they serve.
• Their role saves you time and it needs to be done correctly by an experienced and knowledgeable bookkeeper.
• With a list of bookkeeping services to regulate expenses and analyze results, you can steer your business to the next level.

They also work to prepare for and minimize your small business taxes. This involves putting together monthly and quarterly statements and making quarterly tax filings. At least, those are the traditional roles of an accountant and a https://marketresearchtelecast.com/financial-planning-for-startups-how-accounting-services-can-help-new-ventures/292538/ bookkeeper. So your first consideration is whether you just need compliance – basic bookkeeping – or if you’re ready to graduate to full-service accounting that will help you drive increased profits, improved cash flow and growth.

What Does a Bookkeeper do?

Try us for free—we’ll do one prior month of your bookkeeping and prepare a set of financial statements for you to keep. A bookkeeper manages and records all of your business’s financial transactions. Typically, bookkeepers cannot file tax returns on behalf of other companies on their own.

We do Payroll for all countries in all software and comply with all tax formalities of the IRS, HMRC, ATO, etc. Tell us about your business and we’ll provide you with a simple solution. If you aren’t doing the bookkeeping yourself, follow up with who is. No matter what type of bookkeeping system you use, consistency is vital.

Invest in the Future of Your Business

Bookkeeping is an unavoidable part of having a business because the IRS has certain rules around financial recordkeeping. Aside from staying compliant, having organized books helps you monitor the health of your business, prepare for tax time, and prepare key financial statements. Part-time bookkeepers typically perform smaller tasks like inputting receipts and keeping tabs on employee timesheets. Companies will often choose to train an existing employee or office manager to take on the extra responsibilities of a part-time bookkeeper. While this may be a lucrative option on paper, any oversight or error in the sheets will come at your company’s expense. Handling payroll taxes, employee benefits, paying for sick leave and recruitment costs, or worrying about administrative overheads becomes a thing of the past as our virtual assistants work even on holidays.

To keep the taxman happy and stop you from paying any additional fines, a bookkeeper will make sure your records are accurate, so you’re always prepared for tax. A bookkeeper can stay on top of your business’ accounts daily for all transactions. By keeping track of every sale or purchase and using software to do it all, it’s much easier for them to keep an eye on your cash flow. Our goal as an outsourced financial services provider is to empower our clients with the ability to transform their back office functions into a catalyst for growth.

Best Online Bookkeeping Services for Small Businesses

And this is where we bring in the third prong of the bookkeeping service, the controller. The controller increases the company’s overall financial accountability and checks and balances. A controller reviews the bookkeeper’s ledger for accuracy while also maintaining the integrity of the accounting data file in the future so that adjustments can’t be made without approval.

• Using the rules of double-entry, these journal summaries are then transferred to their respective accounts in the ledger, or account book.
• It involves recording transactions and storing financial documentation to manage the overall financial health of an organization.
• This often involves setting up accounting software and linking it with the client’s bank to pull through transaction data.
• Finally, you’ll want to decide how all receipts and documents will be stored.
• Accountants typically have a higher degree of expertise than bookkeepers.
• While there are certain scenarios where it makes sense to have a dedicated bookkeeper (or several) on your staff, this is typically reserved for very large companies.

However, it’s important to remember that expert financial insights don’t have to cost a fortune—the information that you can get from an online bookkeeping service can prove quite valuable. Small business owners notoriously spend a large amount of time on administrative work, like employee scheduling, preparing payroll, and especially hours and hours of bookkeeping. It is estimated that SMBs spend 120 working days per year on these administrative tasks and bookkeeping. This is time that could be spent doing the work you love that led you to start a small business in the first place.

It involves recording transactions and storing financial documentation to manage the overall financial health of an organization. Most businesses use an electronic method for their bookkeeping, whether it’s a simple spreadsheet or more advanced, specialized software. With remote bookkeeping services, you can trust another professional to tackle all of your tasks.

You can learn about some of the best options in our review of Paychex, our Gusto review and our QuickBooks Payroll review. Setting up direct deposit can take anywhere from one day to a few weeks, depending on the provider. This wait period applies every time new employees are added to the system. Clearly, employers and employees benefit from a payroll system that involves the use of automatic deposits to distribute salaries and wages. Nationally, more than 500,000 corporate employers with 50 million employees — approximately 50 percent of private sector wage earners — use payroll Direct Deposit. In addition, 92 percent of government employees are paid through Direct Deposit.

Using What Are The Benefits Of Direct Deposit For Employers And Employees? can be an effective way to transact business, especially if your company has employees. Understanding the pros and cons of direct deposits can help you make the right decision for your business. Direct deposit cuts all these steps out by having payments transferred directly into your account.

Save time and energy

Let our licensed team of 401k professionals help you decide the best type of plan to offer, whether to involve a match, a safe harbor arrangement, or something like automatic enrollment. At the time of hire you will be given the opportunity to enroll in direct deposit through the new hire process. After that, you can update your direct deposit preferences at any time. You can spit up your deposit into many accounts or even multiple banks. Materials for some products and services are available in Spanish, Korean, Vietnamese, Mandarin, and other languages spoken in the communities we serve. Features that growing businesses should look for include links to other systems, like HR and ERP, as well as security roles and alerts that will help guard against data theft.

The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners. Brainyard delivers data-driven insights and expert advice to help businesses discover, interpret and act on emerging opportunities and trends. Funds are delivered quickly so there’s minimal wait time and faster access to wages. At ADP, we believe sports and business both require the right approach. That’s why we’ve partnered with some of the top athletes in the world. At ADP, we are committed to unlocking potential — not only in our clients and their businesses, but in our people, our communities and society as a whole.

What are the benefits of direct deposit?

Payroll providers usually include direct deposit as part of their basic service for small businesses with no additional fees. Banks and third party applications, however, may charge employers per wire transfer, per employee. If the payroll provider has self-service capability, employees may be able to enter their bank information themselves. Otherwise, the employer will be responsible for getting the financial institution the necessary details.

Continuing to encourage this strategy as part of a financial wellness program can set the framework for a financially stable workplace. If you have 2000 employees and cut paper checks for 4%, that means 80 employees require increased payroll costs. The vast majority of Americans appear to receive their paycheck via direct deposit. In the 2017 “Getting Paid in America” survey by National Payroll Week, data shows that 93.74% of the 34,869 respondents receive their paycheck via direct deposit.

How does direct deposit work?

If your employer pays by check, you need to either pick the check up in person or wait for it to arrive in the mail. Depositing the check requires a trip to the bank and wait time for it to clear, which can take more than a day. This may not be a realistic option if you’re part of a remote or globally distributed workforce. Excessive delays can even create issues with payroll compliance. Having control over where the paycheck goes is another way direct deposit provides flexibility and convenience for employees.

Ultimately, this will create a more equitable, employee-centric pay ecosystem. LLCs and S corporations are different aspects of business operations, but are not mutually exclusive. Use this guide to learn more about the difference between an LLC vs. an S corporation. If an LLC, or Limited Liability Company, seems like the ideal vehicle for your side business, you may be wondering if you can form an LLC while employed at another job. However, direct deposit can become a problem in eviction procedures. Landlord-tenant law varies greatly from state-to-state, between municipalities, and as the laws pertain to residential leases vs. commercial leases.

Learn How NetSuite Can Streamline Your Business

Should something popup – vacation, bad weather, emergency – and an employee is unable to receive or deposit their check in a timely manner, financial issues can arise. Employees with paper checks may be incentivized to leave work early or take long lunch breaks on payday to deposit their checks. Direct deposit eliminates this workplace distraction and allows for improved productivity on payday. There are six easy steps you should take to set up direct deposits for employees. Not only this but you can also run into problems trying to cash the check. For example, if your bank is not the same as your company’s bank, verification can take a couple of days – meaning you’ll need to wait to access your own money.

It compares well to QuickBooks at the lower plan level but is even more affordable if you don’t need more than a single user. When you get into needing lesser-known integrations, more difficult accounting features such as inventory management, or if you need a bunch of users, then QuickBooks starts to become a better option. Wave’s optional paid features include https://www.wave-accounting.net/ online payment processing, payroll software, and access to personalized bookkeeping services and coaching through Wave Advisors. If you’re interested in using payroll software, you can start a free 30-day trial when you sign up for Wave. Zoho Books offers a 14-day free trial and three pricing plans based on the number of users, customers, vendors and features.

• Starting at $45 per month, you can add QuickBooks Online’s payroll service to your core accounting software.
• Well, here, Wave is not winning because it only has supported and built-in integrations with PayPal and Google Sheets.
• We also compared Wave with QuickBooks Online, a paid software service.
• You can pay employees, of course, but also manage tax compliance, benefits, track vacation time, and more.

Xero has over 800 integrations, including a Zapier integration that connects your software with hundreds of other apps and software programs. Wave’s free price tag is great for small businesses, while Xero’s more robust feature set is well suited for medium to large businesses. Payment processing is charged on a per-transaction basis and is 2.9 percent plus $0.30 for Mastercard, Credit card, and Discover payments and 3.4 percent depending on the card type.

You need quick and easy setup

Streamlined features and processes make Wave a simple QuickBooks alternative to learn and use. The robust features and functionality mean QuickBooks can grow and scale with you. In case you want to know more interesting features about Wave vs QuickBooks, you can dial our support phone number. The differentiation between QuickBooks vs wave has possibly helped you in identifying which software works really well with your company and its individual requirements.

Have you read our accounting software reviews but still aren’t sure which product is right for you? To make things a bit easier, we’re taking a look at both Wave and QuickBooks Online, providing you with a side-by-side comparison of the two applications. QuickBooks Online topped our list because of its scalability, its training resources, and its mobile app. Our ratings take into account a product’s cost, features, ease of use, customer service and other category-specific attributes. The “focus on customers” section contains “income by customer” and “aged receivables” reports, both of which help you track the relationship between your money and your customers.

QuickBooks vs Wave: Which Is The Best Online Accounts Package?

Some plans are very comprehensive and expensive (we’re looking at you, QuickBooks), while others are more specialized with the assumption that you’ll use a wider range of their products . A unique selling point for this firm is that their software is free and so users won’t have to compromise on quality in exchange for savings. These impressive features include cost tracking, payment processing, invoicing, and even financing. If you add the ability to accept payments, you pay processing fees, and payroll is an additional $20/month, plus you pay a per-employee fee. Choosing the right freelance accounting software helps you see trends in your expenses and revenue, plan for the future, and stay on top of taxes. Let’s take a look at QuickBooks vs. Wave and see what features and downsides each has to offer.

As mentioned above, this dashboard is extremely valuable even though you can’t drill down into every section. The dashboard interface is pleasing to the eye and easy to navigate, and includes the most important graphs and line items to track the state of your business financials. We spoke with a few Wave customers who raved about the tool, praising its ease of use and flexibility. Cole Torres, who owns Local Eye Media, has been using Wave for about five years and has never needed to consider switching because of how the software has scaled. Our analysts have reviewed over 300 software products in 30 categories. If you know you’re going to focus on scaling your business soon, you might want to avoid tools that are designed with small businesses in mind, such as Wave. As Wave is so easy to set up and use, it’s a better choice than QuickBooks if you’re not sure what you’re looking for or are less tech-savvy.

thoughts on “Wave Accounting”

You can pay employees, of course, but also manage tax compliance, benefits, track vacation time, and Wave Vs Quickbooks Online 2021 more. This simple solution even supports direct deposit, which everyone you work with will love.

Liabilities deal with what the company owes, such as accounts payable, loans payable, mortgages and payroll. Prepare the adjusted trial balance to ensure these financial balances are materially correct and reasonable. Take our free career test to find out if accountant is one of your top career matches. John Iwuozor is a freelance writer with expertise in the technology field.

• The role of a Certified Public Accountant, or CPA, is to act as a financial consultant or advisor to individuals and businesses on issues like tax compliance and business planning.
• The frequency in which you review and evaluate your methods is bound to be unique to your specific business.
• Accounting can be classified into two categories – financial accounting and managerial accounting.
• This principle dictates how much revenue should be recorded, the timing of when that revenue is reported, and circumstances in which revenue should not be reflected within a set of financial statements.
• It’s also true that every accountant who files a report with the Securities and Exchange Commission is lawfully required to be a Certified Public Accountant .

quickbooks payroll accountants overseeing returns in the United States rely on guidance from the Internal Revenue Service. Federal tax returns must comply with tax guidance outlined by the Internal Revenue Code . The Alliance for Responsible Professional Licensing was formed in August 2019 in response to a series of state deregulatory proposals making the requirements to become a CPA more lenient. The ARPL is a coalition of various advanced professional groups including engineers, accountants, and architects. Accounting helps a business understand its financial position to be able to make informed decisions and manage risks. Modern accountants should develop an analytical mindset in order to keep up with trends in the industry and remain competitive in the workforce.

Balance Sheet

They also determine what these statements reveal based on knowledge of the foreign country’s economic and cultural atmosphere. They must hold a bachelor’s degree in accounting, finance, or business administration and complete an additional 150 hours of professional education. They also must pass the Uniform CPA Exam and have two or more years of experience in public accounting. Outsourced accounting firms provide a full accounting department for businesses for a lot less than the cost of a full internal staff. Some will provide the same services as a full-service firm, while others may provide only a subset of these services. If your business ever grows to the point where you need to hire an accountant full-time, most of their time will be taken up by managerial accounting.

Helping an accountant understand the business dynamics, staff skills, and capabilities, in turn, makes the analysis and problem-solving much easier tasks. An accounting job, contrary to popular belief, is not just gathering financial information and crunching numbers for their clients. And getting an accounting degree does not require someone to be a math genius. It does, however, require a hefty amount of creative problem solving and providing goal-oriented plans. Accounting can be classified into two categories – financial accounting and managerial accounting.

Principles of Financial Accounting

Their time-tracking functionality also makes it easy for freelancers who bill by the hour. Freshbooks is a good fit for someone generating a lot of invoices with a low number of transactions. By referring to your balance sheet, you can track how effectively you’re collecting payment. Then you can put in place processes—like harder payment deadlines or better follow-up with clients—to make sure you get your hands on the money you’ve earned when you need it.

In other words, accountants are the financial superheroes you need. Hiring an accountant for your small business is one of the best ways to make sure your books are right from the start. Real accounts are permanent accounts, they are recorded in the balance sheet and are not closed at the end of an accounting year. A CPA, or “Certified Public Accountant”, is recognized in the accounting field.

To support senior management in the decision-making process by appropriately presenting the financial data. Successful accountants can communicate comfortably with both clients and stakeholders and explain information in terms they will understand. (Hallelujah for modern-day technology, right? 🙌🏼) Check out solutions like Gusto, Zenefits, and Intuit Quickbooks Payroll.

Is your small business considering an accounting firm?

Financial accounting creates a standard set of rules for preparing financial statements. This standard set of rules creates consistency across reporting periods and across different companies. An income statement is useful to management, though cost accounting techniques may allow a company to determine better production and pricing strategies compared to financial accounting. Instead, financial accounting rules regarding an income statement are more useful for investors seeking to see how profitable a company is and external parties looking to assess the risk or consistency of operations. International accountants work with companies or organizations that conduct business internationally. They may work to recast foreign financial statements to align with the U.S. generally accepted accounting principles .

Although commonly hired by construction companies and engineering firms, project accountants can find work in any sector. A financial statement of a company can be created at any given point for a selected period of time. Every company has a different accounting cycle, some even do it monthly. Leadership skills are widely appreciated in the work industry, regardless of the job description. These skills include traits that are not usually natural to a lot of people. When it comes to accountants, this asset becomes important exactly because of the characteristics it carries.

This will save you stress and give you the needed time to focus on other important parts of your business. In accounting, you’ll come across certain titles which appear to bear similar duties but actually have unique job descriptions. In this section, we’ll briefly review the roles of accountants vs. CPAs and tax professionals. To learn more about this, and other bachelor’s degree programs that can propel your accounting career, explore our program pages.

Imagine a company received an invoice for $5,000 for July utility usage. Even though the company won’t pay the bill until August, the accrual method of accounting calls for the company to record the transaction in July. In addition to debiting Utility Expense, the company records a credit to accounts payable. Finance and accounting operate on different levels of the asset management spectrum. Accounting provides a snapshot of an organization’s financial situation using past and present transactional data, while finance is inherently forward-looking; all value comes from the future.

Generally, auditors work as part of a team or department, but some auditors work from home, while others travel to their clients’ places of business. In addition, they prepare data for use within a company by forecasting cash flows, creating budgets, and analyzing the rate of return for short and long-term projects. Employed by federal, state and local governments, tax examiners review the relatively simple tax returns filed by individuals and small businesses. They determine how much tax is owed, check returns for completeness and accuracy, code returns for processing, conduct audits and collect overdue tax payments. Tax examiners may also discuss erroneous or missing information on returns with taxpayers.

Northeastern and MLB have joined forces to help professional baseball players have access to higher education degrees. The Lowell Institute School is the premier institution for you to finish your bachelor’s in science, technology, or engineering. After enrolling in a program, you may request a withdrawal with refund (minus a $100 nonrefundable enrollment fee) up until 24 hours after the start of your program.

Staying informed, continually improving, and critical thinking are the key components of https://1investing.in/ing accounting. Having analytical skills translates into having the ability to collect information and analyze it, make decisions, and have a knack for problem-solving. All of this would, for the most part, involve a lot of critical thinking and strategizing solutions, which are the end product of an accounting job. Creditors are the primary external users of accounting information.

At the end of a reporting period, list all of your business’s accounts and figure out their balances. As well as the preparation of reports on project management, budget, and more. However, their major focus is on managing immediate financial issues. And the preparation of reports on project management, budget, and more.

Divide the resulting number into the net sales to get the ratio, which represents the percentage. For example, if sales are $8,000 and costs total $6,000, the difference between the two is $2,000. Divide that difference by sales – $8,000 – and multiply by 100 to get 25 percent.

Basically, it is the percentage of operating profit after deducting operating expenses, interest expense, taxes, and desired dividend shares from income. Overall, the net profit margin formula is a good indicator of profitability.

How Vitaly Grew Their Business Without Relying On Ads

One key metric is net profit margin, which quantifies how much revenue a company keeps after paying all its expenses. Companies with high property plant & equipment (PP&E) assets will be affected by higher depreciation expenses, lowering the firm’s net profit margin. https://accountingcoaching.online/ This may be misleading because the company could have significant cash flow but may seem inferior due to their lower profit margin. On the income statement, subtract the cost of goods sold , operating expenses, other expenses, interest , and taxes payable.

• The components for these formulas (e.g., cost of goods sold and sales revenue) are included in the income statement section of a company’s financial statement.
• If you make more than one item – or offer more than one service – you can either average the costs of making each product or calculate a separate gross margin for each one.
• On the income statement, subtract the cost of goods sold , operating expenses, other expenses, interest , and taxes payable.
• To calculate net profit margin and provide net profit margin ratio analysis requires skills ranging from those of a small business owner to an experienced CFO.
• Gross profit margin measures the income left over after accounting for COGS.
• If you are located outside this area, you may also visit our financial advisors page to see the areas we serve.

On top of that, net profit margin doesn’t necessarily equate to the amount of cash flowing into your business during a particular period. This means you could be short on cash even if your net profit margin is healthy, or vice versa. Profit margin is usually expressed as a percentage, which converts directly to a dollar value quantifying how much of each dollar of sales or revenue is actually profit. A profit margin of 25 percent, for example, means that 25 cents of each dollar taken in is profit.

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For example, let’s say you have a company that has a total revenue of $600,000 with a total cost of goods for the year of $5,000. You pay $200,000 in salaries, $5,000 in taxes, and $50,000 in operating expenses.

For example, a 20% profit margin indicates that a business retains $0.20 from each dollar of sales that it makes. If your gross profit margin and operating profit margin are healthy, but your net profit margin shows issues with the bottom line, you have both nonessential operating costs and overhead you can cut.

What Is The Net Profit Margin Net Income Margin?

Other types of profit margins in a business include the gross profit margin , operating margin and pretax profit margin . These profit margins may also assist companies in creating pricing strategies for products or services. Companies base their prices on the costs to produce their products and the amount of profit they are trying to turn. Net Profit Margin (also known as “Profit Margin” or “Net Profit Margin Ratio”) is a financial ratio used to calculate the percentage of profit a company produces from its total revenue.

The net margin is perhaps the most important measure of a company’s overall profitability. It is the ratio of net profits to revenues for a company or business segment. Expressed as a percentage, the net profit margin shows how much profit is generated from every $1 in sales, after accounting for all business expenses involved in earning those revenues. Apple’s net profit margin is calculated by dividing its net income of $19.965 billion by its total net sales of $84.310 billion. Total net sales are used as the top line for companies that have experienced customer returns of their merchandise, which are deducted from total revenue. Gross profit margin is the gross profit divided by total revenue and is the percentage of income retained as profit after accounting for the cost of goods.

Net Profit Margin Percentage Formula

On the other hand, an increase in expenses could also decrease net sales if too many of those expenses are passed onto the customers in the form of higher prices. If customers decide the price hike isn’t worth the higher quality product, revenue will fall.

• First, it doesn’t give a clear picture of the operating profitability of the company.
• Alternatively, management might attempt to accelerate the recognition of non-cash expenses in order to minimize the amount of tax liability that it must record in the current period.
• Although the generation of more income would be a preferred solution, it is often more difficult than reducing expenditure budgets.
• The margin must be high enough when compared with similar businesses to attract investors.
• This includes any costs directly related to creating a product or service, such as labour and material costs.
• It measures the amount of net profit a company obtains per dollar of revenue gained.

Calculating a company’s net profit margin helps investors evaluate the relative amount of profit the company produces from its revenue. A key indicator of overall financial health, net margin is also an excellent metric to use to compare a company with its competitors. This metric can signal whether a business is doing a comparatively better or worse job of controlling its expenses. To grow your business, you need to track financial information and measure performance.

How Can Retail Firms Increase Their Sales Through Inventory Control?

Your net profit margin, also referred to as your bottom line, is the total amount of revenue left over after all expenses and income is accounted for. Your net profit margin looks at things like your cost of goods sold , operational expenses, payments on debts, taxes, one-time payments, and any income from investments. Its margins are higher when selling a product or service at a total price compared to the sale at a discount. The profit margin that loses through the discount will still have to be offset with future opportunities, so you will have to sell more to recover lost income. If you want to find something more about the margins and discounts, visit our Margin With Discount Calculator! For more calculators in math, physics, finance, health, and more, visit ourCalCon Calculatorofficial page. Put simply, it measures the amount of net profit per pound of revenue.

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Financial Glossary

Profit margins are a large reason why companies outsource jobs because U.S. workers are more expensive than workers in other countries. Companies want to sell their products at competitive prices and maintain reasonable margins.

If a company’s net margin is lower than those of its industry peers, then that could be a sign it is financially weaker or less efficient than its rivals. The net profit margin can be radically skewed by the presence of unusually large non-operating gains or losses. For example, a large gain on the sale of a division could create a large net profit margin, even though the operating results of the company are poor. A company may prefer to grow with debt financing instead of equity financing, in which case it will incur significant interest expenses, which will drive down its net profit margin. Management may reduce long-term expenses to increase their profit in the short-term.

Markup Percentage Calculation

The company’s operating profit margin would therefore be 24% or 0.24. Although net profit margin is a useful metric, it’s not the be-all and end-all when it comes to understanding the overall financial health of your business. To calculate the net profit margin for a company, you divide the figure for net income by the figure for revenue . The result above or below 100% can be calculated as the percentage of return on investment. In this example, the return on investment is a multiple of 1.0 of the investment, resulting in a 100% gain.

How To Manage Your Finances And Cash Flow

The IRS generally doesn’t consider credit card rewards to be taxable income, but there are some exceptions. If you have an eligible Chase credit card, the Shop Through Chase program can help you to earn more rewards through limited-time offers at participating Net Profit Margin Definition retailers. Let’s take a look at an example to see how this ratio is calculated. GoCardless is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, registration number , for the provision of payment services.

When people refer to a company’s “profit margin,” they are usually referring to the net profit margin. The profit margin is a financial ratio used to determine the percentage of sales that a business retains as earnings after expenses have been deducted.