Book Records Tips for Home Business RookiesIf you want your business to flourish you must keep correct and appropriate financial records. A comprehensive financial statement reflects your profits and losses and gives you the direction of your business. It helps you to analyze the results of your previous strategies and guides you in making new decisions. 
Usually small enterprises save money by hiring the services of an external accountant to prepare their tax returns and financial statements. It is far better if somebody within the staff is given the task to look after the accounts. It is still better if you take this responsibility yourself. You may not like it but not only it will save your money but you will always be readily informed about your financial status. You can also exercise better command and control over your finances in this way. Most people are hesitant in handling of accounts but if you start in an appropriate fashion it won't be difficult. First of all, mark a safe place where you can place your material which you will use for book keeping. It may be filing boxes, registers or Manila folders. Then you break them into various heads such as utilities, transport, recreation etc. Keep all the receipts of a financial year in order so that you add them up while filing your tax return. To use the adding machine attach its tape with each of them. There are special books available for this purpose however it is not compulsory for you to use them. But you need to workout a system which suits you. Keeping your records is important. You will need the following items to maintain your record in a small business setting. o Verify the Accounts - You should designate at least one separate bank account to your business. Keep a record of all debits and credits in it. This will help you to confirm your bank statement with the amount and remittances. o Summary of receipts- This is the book where you keep the records of all your incomes along with the reason and source. This may be maintained on monthly, weekly or daily basis. o Summary of payments- This is a record of all your expenditures. Enter all out flowing cash in it whether it is for purchase of material or other expenses such as payment of dues or wages. o List of assets- Keep a complete record of your assets such as furniture, cars and property. Along with their actual price and status for example lease, rent etc. o Record of employees - If you have employees keep a record of their addresses, qualifications and pays etc. If you think that keeping your book record is too complicated for you or you just don’t have the time to do it, you can always hire a professional. This is the ideal option, especially when your home business grows and starts returning your investment. |