5 Stepping Stones to Stronger Accounting:
My Business is profitable but I don’t see cash!!!!
I don’t know where my is money going despite having great sales!!!
Book of Accounts is Greek and Latin to me!!!
Are these your challenges? Here are 5 easy stepping stones to be in complete command of your accounts.
The strongest pillar of your accounts would be Receivables. Review it every week to ensure that you collect all your money on time. Remember “Cash is King”.
- Proper Documentation:
Maintain different files for all your documents. As per FTA law you need to maintain books for at least 8 years.
- Segregate your documents as Sales, Purchase and Petty Cash.
- Stamp your documents as entered and paid, it will ensure that you have accounted each document and avoided duplicate payments.
- Accurate Entry:
To ensure you have a perfect account you need to keep the following in mind:
- Avoid posting anything to Miscellaneous and Suspense accounts. Remember these are traps.
- Business bank accounts to be reconciled on a Weekly or Monthly basis depending on the volume of the business.
- Petty Cash to be reconciled daily.
- Segregating your business and Personal Accounts:
A thumb rule would be never spending anything personal from your business accounts. You and your business are two different entities.
- Books to be reviewed by a Professional:
You can certainly maintain your own books of accounts specially with user friendly accounting software. Ensure it is reviewed periodically by an accountant for meaningful reports.