Home News Record Keeping and Basic Bookkeeping

Record Keeping and Basic Bookkeeping

Record Keeping and Basic Bookkeeping

What to avoid when budgeting and make your money stretch using correct financial planning˳

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Basic bookkeeping for business owners˳

How to limit stock losses through stock wastage, breakage and spoilage˳


Many businesses fail due to inadequate or non existent filing and record keeping systems˳ Another reason for failure is the lack of monitoring profitability, bank balances and cash flow forecast in comparison to actual cash flow on a routine basis˳

Nothing is more embarrassing or frustrating to be caught in the trap of being unable to find important documents at crucial moments˳

For example; I once visited a business, who became my client and, during the discussion, the one director mentioned an issue with one of their suppliers concerning prices and a credit note which was incorrectly passed˳ She insisted on showing me the history and started searching for the relevant documentation˳ Do you know that after a half an hour she had located the supplier’s invoices and monthly statement in two separate files, but could still not lay her hands on the credit note or the last payment advice? She blushed ashamedly˳

I asked her whether their previous accountant had suggested a proper filing system, in which case she would have been able to lay her hands on the whole set of supplier documentation within ten seconds˳ SHE TOLD ME THAT SHE HAD DESIGNED THIS FILING SYSTEM HERSELF AND ADMITTED THAT IT WAS AN ABSOLUTE SHAMBLES˳

Not to mention that I changed their filing system immediately on taking over their accounting˳ All suppliers documentation must be filed together, sorted only by supplier name and filed alphabetically˳ They had all the supplier’s invoices in one file, all credit notes in another, all payments in another, all orders and Goods Received Notes in yet another, and queries in another˳ More like a spider web to my mind˳

I suggest that you keep a filing system structured as follows:

A separate file, or set of files, for:

– All business or company registration documents

– The minutes of meetings

– Formal and annual financial statements

– All managements and informal operating reports, as these are used for decision-making

– All Revenue Services registration documents and monthly/bi-monthly returns

– Industry Regulatory Authority documentation

– Labour Relations and Union related documents

– Retirement Fund registrations and monthly returns

– Medical Aid registrations and monthly returns

– Contracts

– Staff Letters of Appointment

– Salaries and Wages

– Suppliers / Creditors and their monthly reconciliations

– Customers / Debtors and their monthly reconciliations

– Legal matters and Labour Disciplinary Hearings

– Bank statements and reconciliations, a separate one for each bank account

– Petty Cash book and reconciliations

– Any other separate group that may exist in your business˳

This method of filing will at least be a good, structured start to keeping the books of a business and having access to all source documentation˳

To read more along these lines, follow the information in the author’s biography˳

Source by https://ezinearticles˳com/?Record-Keeping-and-Basic-Bookkeeping&id=1667595

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