Keeping proper accounts for a business is not only smart but also quite necessary. Ecommerce bookkeeping can be confusing if one does not know what to pay attention to. One should remember that the accounting concepts remain the same. Only instead of keeping a folder with lots of receipts and invoices, one will have a folder in their cloud with digital ones. Every once in a while there will be a paper receipt for a business expense. These should be properly stored too.
That is something to do every day. Some activities will be left for the end of the week. Like a check on the cash flow and variable expenses for example. These do not require a daily check and recording much like the petty cash expenses mentioned above. Having a weekly record of how the financial situation looks enables fast and knowledgeable decision making.
The daily and weekly reports are journals of some sort. The monthly report is more comprehensive. It has all the bits from the journals. One should create an income statement. This will reveal the amount of profit made in that month. One should also do a statement of assets against liabilities. From these monthly reports, one is able to draw up a pattern. One can see if the sales are on their way up. One can look at the expense trend. Such things make it easier to compare performance between months.
Before beginning the exercise of self-accounting, one should learn the importance of some aspects. Accounts receivables, for example, are often misrepresented. Some look at the money due to them as their funds. This should be clear, it is an asset sure. But, until the accounts are settled that money is not available for plans and budgeting. Do not be too optimistic. Sometimes that money is never availed for expenditure.
There are times when the transactions on the bank statement will not completely match those on the accounting records. Maybe there is a cheque that was presented to the bank but has not cleared yet. Or a cheque was paid to a supplier but they have not banked it. There is also bank charges like interest. A bank reconciliation will reveal possible issues with the accounting. Once the above errors are accounted for, there should be no more unmatched transactions.
One must ensure to back up all accounting and financial information. Things happen. A fire. A burglary. Losing files in a move. There really is no telling what could happen to files that have only been stored in a computer. It is easy to get online storage space now. Take advantage of it.
Sometimes one might try really hard but things just fall apart. Maybe they lack time. Time to get the records done on time. Maybe they lack expertise. The above words are great to know but not nearly enough. Or maybe they just have too much on their plate This is especially true for sole proprietorships. Where one person is responsible for everything. In this case, try and find an affordable accountant to sort things out.
Finding an accountant or firm to handle things should not be haphazard. Caution should be exercised. Find a qualified person. Make sure they adhere to accounting principles. Do due diligence. Most of all ensure the fees do not drive the company to the ground.
That is something to do every day. Some activities will be left for the end of the week. Like a check on the cash flow and variable expenses for example. These do not require a daily check and recording much like the petty cash expenses mentioned above. Having a weekly record of how the financial situation looks enables fast and knowledgeable decision making.
The daily and weekly reports are journals of some sort. The monthly report is more comprehensive. It has all the bits from the journals. One should create an income statement. This will reveal the amount of profit made in that month. One should also do a statement of assets against liabilities. From these monthly reports, one is able to draw up a pattern. One can see if the sales are on their way up. One can look at the expense trend. Such things make it easier to compare performance between months.
Before beginning the exercise of self-accounting, one should learn the importance of some aspects. Accounts receivables, for example, are often misrepresented. Some look at the money due to them as their funds. This should be clear, it is an asset sure. But, until the accounts are settled that money is not available for plans and budgeting. Do not be too optimistic. Sometimes that money is never availed for expenditure.
There are times when the transactions on the bank statement will not completely match those on the accounting records. Maybe there is a cheque that was presented to the bank but has not cleared yet. Or a cheque was paid to a supplier but they have not banked it. There is also bank charges like interest. A bank reconciliation will reveal possible issues with the accounting. Once the above errors are accounted for, there should be no more unmatched transactions.
One must ensure to back up all accounting and financial information. Things happen. A fire. A burglary. Losing files in a move. There really is no telling what could happen to files that have only been stored in a computer. It is easy to get online storage space now. Take advantage of it.
Sometimes one might try really hard but things just fall apart. Maybe they lack time. Time to get the records done on time. Maybe they lack expertise. The above words are great to know but not nearly enough. Or maybe they just have too much on their plate This is especially true for sole proprietorships. Where one person is responsible for everything. In this case, try and find an affordable accountant to sort things out.
Finding an accountant or firm to handle things should not be haphazard. Caution should be exercised. Find a qualified person. Make sure they adhere to accounting principles. Do due diligence. Most of all ensure the fees do not drive the company to the ground.
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Get a detailed list of important things to consider when selecting a bookkeeper and more information about a professional who offers ecommerce bookkeeping services at http://www.zynergybooks.com now.
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