As an accounting major in college, I quickly learned all of the complicated parts of the accounting cycle. I discovered how to input the details of business transactions into a computerized accounting system. At the end of an accounting cycle, such as a month, I became experienced with calculating the revenue for the period. If you’re starting a new business, determining an accurate amount of revenue for each accounting cycle is crucial. You must know how much profit you’re making each accounting period in order to be successful in the long-term. On this blog, you will discover how an experienced accountant can help you keep track of your revenue.
As a small business owner, it is easy to overlook certain components of running a company, such as accounting for your company's financial transactions. However, by skimping on your accounting chores, it is difficult to see how your business is doing.
For example, you need to see if your company is turning a profit, which expenses are too high, or what customers or products are not profitable enough. To make keeping your company's books a more manageable chore, try to complete these three accounting tasks on a daily basis.
1. Record Your Transactions
Each day, set aside a small amount of time to record new transactions and post them to the appropriate accounts. By doing so, you keep an accurate running picture of your company's financial picture.
Depending on your volume of transactions, you may want to invest in accounting software. Accounting software makes it simple to catch errors and pick which account you want to post transactions to.
For companies that are just starting out, posting the transactions manually is perfectly acceptable. Just take care to carefully review the ledger for accuracy.
2. File Your Documents
Though it is tempting to just throw all of your invoices, receipts, and bills into a shoe box until it is time to create your monthly financial documents, this is a recipe for disaster.
Instead, take a few moments each day to file your documents. The exact amount of folders that you need depends on your business. Some small businesses like to make a folder for each vendor. For receipts, it is helpful to have multiple files for categorization. As an example, you may want to have a file for client expenses and one for supplies.
One option is to invest in accounting software that allows you to scan your financial documents. Then, you can ditch the paper copies and electronically file and organize your documents.
3. Check Your Cash
At the beginning of each day, check that you have enough cash on hand for your day. Nothing is worse than being in the midst of a lunchtime rush only to discover that you do not have enough cash to make change.
Perhaps as important as having enough cash is having the right type of cash. For example, having $500 of twenty- and fifty-dollar bills is a completely different situation than having $500 of one and five dollar bills.
Once you know what cash you need or don't need, you can decide if a trip to the bank is in order. Make sure to record any withdrawals and make any required reconciliations to your petty cash drawer.
For more accounting tips, contact a professional like Don Lamb CPA Inc P.S.Share