Banks are evolving daily and with it comes new products and branding to try and keep up with the competition. In the midst of all…
The accounting aspect of a business, whether done professionally or by using a simple Expenses and Income column method, will help determine the heights to which a business soars. Allow me today to focus on these two aspects.
If you are a small business owner it is necessary that you keep track of your daily incomes and expenditures no matter the field you are in. This daily accounting records should then add up to make the weekly accounting record and eventually the monthly records and so on.
To be able to do proper accounting in your small business pay attention to these two factors.
1. Track and Record Each Expenditure
Expenditure in a small business comes in two forms;
This is the type of expenditure that is incurred justonce in the life of the business such as registration fees, paying to put up structures in a stall or even buying a laptop to aid you in your online writing venture.
This is the type of expenditure that you will incur over the course of business operations repeatedly. They include rent, a salary to yourself and other workers in the business, for online entrepreneurs, data bundles are part of your recurrent expenditure.
In order to keep track of these two types of expenditures, ensure that you have a book whereby you record all the transactions that occur in the business whenever you are paying out money to suppliers or giving it to employees to purchase airtime to call a client or get something for the business.
It’s advisable to also keep a separate notebook that you can carry around easily. This will help you keep track of Expenses that you incur while away from your business such as bus fare to meet a client. Make sure that you reconcile this notebook entries with the actual accounting book of the business each day.
All Expenses need to be clearly dated to help in easy follow up of the same in case an issue arises. Maintain a separate page for each day’s Expenses as well.
2. Track and record each income
It is easy to record incomes if they happen instantly at the place of your work. But this may prove to be difficult if too many people come to your shop all at once. In order to remedy this, keep track of your stock instead and immediately the number of clients reduces, go back to your shelves and record what it is that you have sold. If your type of business does not allow this method of recording transactions you can always modify it to adapt to your needs.
Look out for instances whereby you sell goods or services on credit, a separate credit book should be maintained and the transactions should only be counted as an income immediately the payment has been made and thus moved to the incomes books.
At the end of the day, reconcile the two books and get the current standing of your business. This will help you understand whether your business is making a profit or a loss. One thing to note is the daily trend might be different from the weekly or monthly trend and thus your business might be making a loss in the short run, but a profit, in the long run, the opposite is also true.
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