How to Create Simple Bookkeeping for Small Business

Rancakmedia.com – Many people ignore how to make simple bookkeeping for small companies. The reason is, many are more focused on marketing and product quality. In fact, paying attention to the movement of funds in and out every day is very important.

Every business, of course, must pay attention to how to record finances, even though it is still on a small scale. Because, after the business develops, purchases will immediately increase. So the number of transactions will also increase.

At that time, you will understand how important the amount of debt, income and receivables is for profits to be achieved effectively. For this reason, below is information on how to make easy bookkeeping for small companies, which is very important to note.

The Importance of Maintaining Bookkeeping in Small Business

The mistake that entrepreneurs often make is mixing up finances. Usually, beginners feel confused about dividing finances company and personal. That way, there will be financial misunderstandings. For this reason, no matter how small the company is, it still has to complete financial records.

Some of the benefits of financial bookkeeping are:

  • Can reduce the danger of losing goods, assets and money.
  • Can find out the tax liability because of the business done.
  • Can affect the assets owned affect the profits and losses of a business in the future.
  • Can know the amount of accounts receivable and payable.
  • Manage expenses related to business operations.
  • Can know the progress of the business being carried out.

how to make simple bookkeeping

How to Create Simple Bookkeeping for Small Business

Before understanding examples of easy bookkeeping for small companies, you must know the fundamental accounts on each bookkeeping that apply to small businesses, along with the reviews:

1. Create Expenditure Notes

When starting a new business, the most important thing to do is to keep a separate expense log. Some types of expenses that you should record are the purchase of raw materials, operational costs, and employee salaries. Record in one table clearly.

With this, you can also find out more about the amount of business capital that has been provided. If so, then you can start setting goals and tactics so that your money can be paid off.

2. Create a Log In Note

After recording expenses, then make recording of income in a different book. This book is used to record various types of income starting from the amount of product sales, and receivables that have been paid.

Recording income is an important step in keeping track of your business finances. It is highly recommended to keep this record continuously every day. Revenue records are important to understand the profits generated by entrepreneurs.

3. Create a Master Cashbook

Next, you also have to create a master ledger. The goal is to integrate disbursements with income ledgers. So, you can also find out the advantages and disadvantages faced by the company.

To record finances for your small business, this ledger has an important function in developing plans and preparing if the company has unexpected expenses in the future.

4. Prepare a Stock Book

It is also important for employers to offer separately owned stock books. Continuously record the things that come in and go out throughout the day. Increased sales will also increase the amount of incoming and outgoing goods.

This book is useful to make it easier for you to monitor and monitor the goods in your company. Especially if in the near future you intend to increase sales targets or maybe set up a branch.

5. Create an Inventory Book

Not only stock books, you also have to keep checking inventory. Budgets for grants, expenditures, and contributions must also be recorded in an inventory book.

The benefit of this book is that your business assets can be managed properly. Another benefit can help prevent things from being easily misplaced. Mutation activity will be simpler.

6. Prepare a Profit and Loss Book

One more thing that you shouldn't ignore to order small business finance. This book is useful for recording all types of company income and expenses for a certain time.

Another advantage is that you can monitor whether the company is profitable or even losing. In big business, the profit and loss book has a role to play in evaluating the value of investments and forecasting future cash flows.

The profit and loss book will provide information on the amount of tax you have to pay. And can assess the company's strategy.

FAQs

Below is a question and answer session that we will discuss, see the following info:

What Is Simple Bookkeeping

Simple bookkeeping is the process of recording periodically with the aim of collecting data and financial information. Financial records include assets, liabilities, capital and other expenses which are closed by compiling financial statements in the form of a balance sheet for the period.

Bookkeeping Type?

Accounting methods in the world of accounting are divided into two types, namely single entry and double entry. Both types of accounting are used to record financial transactions in companies.

What is the Purpose of Bookkeeping

The main task of accounting is knowing every transaction made within the company. There will not be a single transaction that is missed or not recorded. In this case, accuracy is required to record.

Conclusion

Every business must pay attention how to record finances although still small. As the business grows, the number of transactions will also increase. When starting a new business, the most important thing to do is to keep a separate expense log.

Revenue records are important to understand the profits generated by entrepreneurs. Continuously record the things that come in and go out throughout the day. It's also important to keep a check on inventory. In big business, the profit and loss book has a role to play in assessing the value of investments.

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