The MWE Distribution Advisor is our quarterly e-newsletter focused on the specific concerns of Distributors. In this edition, you’ll learn about the major accounting rule changes for lease and revenue recognition, what the research and development credit becoming permanent means for your business, and how to reduce waste.
Leases and contract revenue
Get ready to roll out the new accounting standards
Major accounting rule changes for leases and revenue recognition are expected to have significant impacts on how manufacturers and distributors report their financial results. This article explains what’s changing and when, as well as how the updates will affect financial statements. A sidebar lists five steps companies need to take to recognize revenue from customer contracts under the updated guidance.
Spotlight on the research credit
After being continually renewed since the 1980s, the research credit was finally made permanent under the Protecting Americans from Tax Hikes (PATH) Act. This change allows manufacturers to plan (with certainty) for their R&D expenditures. And it’s expected to survive any tax reform legislation that will pass in 2017. This article provides an overview of the current rules on how to claim credits for R&D spending, including how the break has been expanded for certain small manufacturers.
Combining liquidity and efficiency metrics
Cash conversion cycle – a useful management tool
The cash conversion cycle is a financial metric that evaluates the time it takes your company to convert inventory purchases to cash collected from customers. This article tells how it’s calculated and what it means.
How to reduce waste
Scrap materials sometimes pile up on the shop floor, leading to safety issues and cleanup costs. But waste extends beyond trash in a manufacturing context. This article explores the concept of waste and provides creative solutions for reducing it with preventive maintenance, routine physical inspections and effective quality control.
Read: Winter 2017 Edition
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