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.
- Receivables:
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.
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