BASIC ACCOUNTING…IT’S A MUST!
Accounting, keeping track of income and expenditures is essential for small business growth. I feel that every business that is started should be built on the premise that it will be put up for sale within five years and its value will depend, to a large part, on accounting numbers.
As basic as this may seem, I find that many small businesses don’t feel that by understanding and adopting the following, their business has a much better chance to survive and grow.
Deposit slips: When you receive a payment, one or more, you will have to deposit that money into your business bank account. Always prepare a deposit slip and note on the slip who originated the payment. In case of several checks being deposited at the same time, knowing who paid and the amount may be important knowledge at some future date.
When you buy for your business: Every time you must make sure that you get an invoice or cash register receipt. Make sure that the purchase and purpose for the purchase is identified on the receipt.
Check book is also a record book: If your checkbook has a check stub make sure that you spell out to whom the check was written, the date, as well as the purpose. If your checkbook does not have a check stub, make sure all the information is written on the check and make a copy of the check for your records before you send it.
Bank Statements: For your business checking account you will receive a monthly statement, either in the mail or online. Always reconcile your accounting system to your bank statements on a monthly basis.
While these four items may seem like something everyone should know, many business owners leave these four steps to be completed at a future date. By handling these four action items as they occur, your overall financial system will be much easier to maintain.
Don’t become the person that says, “I have more important things to do. I’ll catch up with accounting at a later time”. The delay will come back to haunt you.
Hold the VISION. Trust the PROCESS.
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