It is important for all entrepreneurs to keep financial books for their business, even if it is a small business.
This financial bookkeeping is useful because it can help entrepreneurs pay attention to the amount of income, debts and receivables so they can calculate business profits.
There are several ways to keep small business financial books, such as recording expenses, recording income, and recording profit and loss. Check out how in this article.
How to do small business financial bookkeeping easily?
Some people who have just entered the world of business may often ignore how to record small business finances.
Usually they only focus on products and marketing without paying attention to the cash flow that comes in every day.
Are you among the group of entrepreneurs who have just entered the world of business?
If the answer is yes, the following article will be very useful for you.
In fact, focusing on product marketing is something that is highly recommended for entrepreneurs, especially if your product is still relatively new on the market.
However, you also need to make sure that you follow the correct financial bookkeeping procedures for small businesses.
Why should small business financial bookkeeping be considered from the start?
Because when your business starts to grow and purchases increase, the number of transactions carried out will increase.
It is very important for you to pay attention to the amount of income, debts and receivables that you have so that you can calculate the amount of margin and even increase financial profits to the maximum.
Actually, financial bookkeeping procedures for small businesses are not complicated. However, many entrepreneurs ignore it, causing delays in business processes, fraud in business, and even bankruptcy.
Why is that? Because you cannot take the right policy regarding income and expenses.
Then the question arises: when is the right time to make company financial books?
It’s best for you to implement small business financial bookkeeping methods from the start. Then, how is it arranged?
If large company financial bookkeeping is usually left to a professional accountant, the following are the types of records that OnlinePajak recommends for small business financial bookkeeping for those of you who have just started a business:
1. Make an Expenditure Notebook
In the early stages of starting your new business, don’t forget to keep a separate expense notebook. All expenses ranging from operational costs, purchasing raw materials, to employee salaries can be grouped in one table and recorded clearly.
By keeping notes, you will know how much business capital has been spent. Once you know how much capital you have spent, you can more easily set targets and strategies for returning your capital.
Don’t forget to include taxes in expenses.
2. Prepare an Income Notebook
If you have previously prepared special expense records, now also record the amount of business income in a separate book.
This income notebook/cash book will specifically be used to record company income, for example the number of product sales you have managed to get per day, as well as receivables that have been paid.
Income records are an important step in small business financial bookkeeping. So make sure to keep continuous income records every day. By having income records, you will know how much profit you earn every day.
3. Create a Main Cash Book
In company financial bookkeeping, creating a main cash book is one of the most important things. This main cash book will later be used to combine transactions between the income cash book and the expenditure cash book.
By combining transactions from the two cash books, you will know in detail and clearly what the company’s profits and losses are.
In the small business financial bookkeeping method, the main cash book also plays an important role in making company planning and strategy if there are unexpected costs that must be incurred in the future.
4. Specially prepare a stock book
Don’t forget to provide a separate stock book for small business financial bookkeeping. The transactions you have to record are not only related to cash flow but also goods.
You need to continuously record the number of goods that come in and go out every day. The higher the sales level, the higher the intensity of the number of goods going out and coming in.
With a stock book, you can monitor and supervise the inventory of goods in the company. Especially if in the future you want to add business branches and have a target for how many products to sell.
The stock book will help organize warehouse management more optimally. By regularly monitoring stock, you can minimize fraud committed by suppliers.
5. Create an Inventory Book
After preparing a stock book, also prepare special notes regarding the company’s inventory of goods that have been purchased and managed.
All types of goods owned by the company, whether purchased through the budget, grants or donations, must be entered in the goods inventory book.
An inventory book will keep your business assets under control. Recording the inventory you have also has other benefits, such as preventing items from being easily lost, making it easier to check items, and making mutation activities easier.
6. Prepare a Profit and Loss Book
One more note that should not be left behind in small business financial bookkeeping. The profit and loss book is used to record a company’s income and expenses in a certain period.
By keeping records you can find out whether the company is experiencing losses or has a number of profits. In large-scale companies, the profit and loss book also functions to determine investment value and predict future cash flows.
Apart from the advantages above, another function of the profit and loss book in small business financial bookkeeping is to provide information on how much tax the company must pay and evaluate whether the company’s strategy is sufficient to generate profits.
How about it, it’s quite easy to keep track of small business finances, right?
Make sure you don’t miss a single note, so you can monitor how much profit you have made. Good luck!