Basic Accounting Principles.

byNonki

195 followers

10 years ago

I decided to share my knowledge and skill when it comes bookkeeping and accounting. At WA we are also in business, so we need to know how to deal with record keeping, so that we do not find ourselves in a place where we will not like. Some of us are already successful here in their businesses.

Filing System and Record Keeping

How many Rands did you have in your pocket this time a week ago? Every day in business there are transactions taking place, like buying or selling. One of the greatest problems in any small to medium sized business, the lack of adequate business records or Books of Accounts. Many entrepreneurs are far too busy selling or manufacturing to pay attention to this.

It is absolutely essential that:

• You keep comprehensive records
• You use the information at your disposal to manage your business more effectively

Your record keeping system should be:

The approach

• 1.Decide which books of account you need.
• 2.Accurately collect all the information

The invoices, cash slips, delivery notes and other document that we get and give in business are called vouchers.

Keep all the vouchers from suppliers (even milk and tea from the Café). You should issue your customers with a cash sale slip or invoice. If you have a cash register, this will be done automatically. Make sure you always have two copies – a numbering system will help.

Wholesale traders who sell large quantities should get the customers to sign on the second copy, indicating that they received the goods in good order.

Filing

Unless you are exceptionally disciplined, if you do not have some filling system you will lose documents and vouchers.

We suggest the following basic filing system:

• a)Two files for purchase and service (expenses) invoices:
• -One file with paid invoices
• -One file with unpaid invoices

Please note: Paid invoices should be marked with the date and cheque number used for payment.

• b)Two files for sales invoices and receipts:
• -One file for paid sales invoices
• -One file for unpaid sales invoices

Please note: Paid invoices should each be marked with the date on which they were paid.

File all vouchers in monthly and alphabetical and/or numerical order.

• c)Different colored Accounting Books (usually supplied as such) for your needs.
• d)A file with all banking correspondence
• e)The same colored files for all your clients – these should contain maximum information – organograms, telephone numbers, habits, needs, wants, sporting preferences, etc.
• f)Personal files and/ or any other preferences.

Keep all the above files and slips in a safe place. By filling daily and effectively we will automatically sort the information into appropriate categories for our Accounting Books and this will make our bookkeeping simpler.

Remember: In most cases, we will legally have to retain records for 5 years or more.

• 3.Record it in the appropriate Books of Account
• 4.Check it for accuracy and comprehensiveness
• 5.Ensure that essential information is analyzed, interpreted and used.