How to compute Percentage Tax in the Philippines

This article aims to guide businessmen and professionals in computing their percentage tax payable to the BIR. Your humble friend here is also subject to percentage tax. Accordingly, I’m also paying percentage tax every month aside from quarterly and annual income tax payables. Percentage tax, like Value Added Tax (VAT), is also considered as a business tax rather than an income tax. This means that whether you generate income or incur a loss, as long as you have sales or revenue, you must pay a percentage tax. This is because business taxes are taxes based on gross sales or receipts rather than based on net income (before income tax). Read more

How to avoid financial losses in your business

Profit is what we aim in doing business. By achieving it, we can gain financial power that we can use to stabilize our way of living including those of our family, friends and community. It is a joy for every businessman to have a net profit in their statements of income. On the other hand, a net loss at the bottom of those statements may make them frown. Financial losses may occur whether your business is big or a small one. But no matter how big or how small you have, you should do something to avoid those negative results in your operations. Income and losses are the possible results in your income statement. Hence to attract income and get rid of losses, we should know how to play with the nominal accounts – revenues and expenses. The following are the tips and ways on how to stay away from those losses. Read more

What is Viral Marketing?

To clearly define what viral marketing is, we’ll first define the two words composing it – “viral” and “marketing”. Let’s first take a look at the definition of marketing.

Marketing, as defined by the American Marketing Association (AMA), is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Marketing is a huge subject. If you don’t have a basic knowledge of it, it may take a lot of textbooks and tons of articles to fully understand the subject of marketing. But basically, marketing focuses on the processes. These processes involve researching (creating), promoting (communicating), selling (delivering) and distributing (exchanging) your products and services. The components of a marketing mix include the four Ps (product, promotion, placement and pricing). These four Ps of marketing have been modified further to become more costumer focused. This is what is known as SIVA. SIVA stands for solution (product), information (promotion), value (price) and access (placement). Read more

Business in Boxing: Manny Pacquiao versus Ricky Hatton (Battle of East and West)

On Saturday night, May 2, 2009, at the MGM Grand Garden, boxing’s pound for pound king Manny “Pacman” Pacquiao of the Philippines and Ricky “Hitman” Hatton of England will face each other for the boxing’s world supremacy. The ring magazine and IBO championship belt at 140 pound held by Hatton and the pound for pound crown of Pacquiao are on the line. But this clash is not only for the two boxers, Pacquiao and Hatton. Their trainers, Freddie Roach and Floyd Joy Mayweather, Sr. (father of five-division champion and former pound for pound king Floyd “Pretty Boy” Mayweather, Jr. are also putting on the line their reputation as the best trainer in the world right now.

Millions of people around the globe excitingly awaits for this very exciting and action-packed guaranteed match between the two of the world’s best warrior alive. And as I write this article, I feel the enthusiasm of watching this event. But this is a business oriented site. So what is boxing doing in this site anyway? Well, there is huge money in boxing. And when there is big money, Read more

How to Compute Profit for a Service Provider Company

A service company is one that sells services to its clients. Different from manufacturing and trading companies, it provides services or works of labor rather than tangible products to its customers. Accounting firms, law firms, schools, janitorial and hotel companies are some of examples of service provider companies. As the operation of this kind differs from the others, the computation and preparation of its statement of operation also differs. Since a service company sells services, we need to compute its cost of services, as computing cost of goods sold in a manufacturing and trading firms which sells goods to its costumers. But in all kind of firms, we compute direct and indirect costs to determine gross and net profit.

The revenues of a service company consist of all its receipts and receivables from rendering services during the period less all refunds associated from them. Unearned revenues collected during the period are not included because they are not related to the services rendered during the period. This concept is called accrual basis. Read more

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