What do you use to record your business transactions? A carrier bag! No wonder your accountant’s bill is through the roof. I bet you’re the sort of person who doesn’t bother to complete the cheque book stubs or the bank paying in slips. You probably pay bills by credit card and then promptly lose the credit card slip, have no filing system for your invoices and forget to record when and how you were paid for a sale. Are your bank charges enormous? That’s probably because you write out cheques willy nilly without giving a thought as to whether there is enough money in your account. How can you hope to run a successful business if your paperwork is in such a mess?
Here is a system that will get your business in order: -
1. Every time you complete a sale produce two copies of your invoice, give one to your customer and file the other in the file labelled “Unpaid Sales”.
2. When your customer pays you write on your copy of the sales invoice the date you received payment and whether it was by cash, credit card or cheque. If your customer makes more than one payment for each invoice write the date and method of payment each time.
3. When the invoice has been fully paid transfer it to the “Paid Sales” file.
4. Bank the whole of the sales money received whether it’s cash or cheque and make sure you fill in the paying in slip with the customer’s name and the amount you were paid.
5. Check each credit card receipt against the statement from the card company.
6. When you make a purchase through an account you have with a supplier file the invoice in the “Unpaid Suppliers” folder.
7. When you pay suppliers invoices write on each the amount and date paid, and the method paid. If paid by cheque write the cheque stub number on the invoice and be sure to record the details of the payment on the cheque stub.
8. After paying the invoice transfer it to the “Paid Suppliers” file.
9. If you make a purchase by debit or credit card make sure you get the card slip and the VAT invoice. These invoices should be filed directly into the “Paid Suppliers” folder with the card slip attached to them.
If you follow these simple rules you will be part way toward a decent accounting system, and, who knows, you may even get a reduction in your accountants fees.