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Keeping accurate records of your business accounting activities is
essential. As well as giving you an idea of how well your business is doing, it is also
necessary by law.
Neglecting your book keeping could cost you a lot of money in the
long term as it would take your accountant twice as long to draw up your accounts at your
year end. Life is hectic enough when you first set out in business, but you should always
make time for book keeping. If you can afford it, get some-one in to help keep your books
in order.
What records do you need to keep
Cash book
This record keeps track of all your financial incomings and
outgoings. This record book should be checked against your monthly or weekly
bank statements.
The balances will never match as your cash book will be ahead of any statement you
receive, but important thing here is keeping this record accurate and up
to date as it will indicate what you have received from your customers and
spent - all important stuff.
Keep this book as accurate as possible. The more detail you include
in this book the better.
Consider recording:
- cheque numbers against amounts paid
- Invoice numbers paid and the companies who have paid them
- Transaction dates
- Direct debits or standing order payments
Sales Ledger
This book records invoices you have sent to your customer or
clients. It also records who still has not paid!!
Keep a duplicate of any invoice you have sent our in a folder or
file. The unpaid invoices can be kept separate and then transferred once they have been
paid. This will avoid confusion and will help if any credit control procedures are
necessary.
Consider recording:
- Dates of invoices
- Dates payment is due and when it has been chased
- Invoices paid and invoices owing
- Discounts for early payment if offered
- Company names
- Invoice numbers
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Neglecting your book keeping could cost you a lot of money in the
long term as it would take your accountant twice as long to draw up your accounts at your
year end. |
Purchase Ledger
This book records money you owe other companies. If you are offered
credit by various companies, then this ensures you pay on time.
Consider recording:
- Terms agreed
- Dates of paid or due payment dates
- Invoice or purchase order numbers
- amounts owed
- cheque number of items paid
As with your sales ledger, keep your unpaid invoices separate from
the paid.
Petty cash book
This book keeps account of all the miscellaneous spending. This
might include: child fees, window-cleaning bills, stationery, postage, cleaning supplies
and any other sundry item.
In order to keep record you will need to create a float. Your float
can be anything from £50 to £100 depending on how much you feel you would need for you
Sundry items.
Keeping receipts for all these transactions is also important as it
will help you to account for the money used.
Check your records once per week or month and replenish your float
at regular intervals
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