One of the most important parts of running a successful company is knowing exactly where you are cash wise, there is a saying that says profit is king but cash is usually everything, it is no use possessing a good profit in the books but no cash in the bank, you need cash to run a successful business, after all what do you pay your creditors with? Cash or money you have in the financial institution, every business knows what happens if you don’t pay your creditors, you don’t stay in business long, same with Debtors, no good on the books, looks good sometimes, but its better in your bank, but debtor collections are another topic.
OK we know that cash is important and should know what our cash position is at all times, but how do we go about achieving this knowledge, create a cashbook or cash ledger, same thing really, just names.
What is a cash book, you may ask, fair enough, cashbooks record in date order your expenditure and your deposits for the particular bank account in the order associated with transaction date, this usually means as you write out a cheque so you report it in the cash book, if you do this at the time not only are you conserving time but you will be recording the cost accurately, think about it, how often have you said to yourself what the… was this particular cheque for? Even more important is the recording of eftpos transactions because close to the time of payment as possible it becomes ever increasingly difficult to remember the actual cost was for, week or months down the track. Recording on time of event accurately enables split coding of the expense, for example a $300. 00 withdrawal may involve a $50. 00 business expense and $250. 00 personal, are you going to remember this 3month later, my experience tell me no . This is under stating expenses, thus increasing taxation. (Of course you are keeping track of all these receipts as you go, and submitting them correctly)
The same applies to debris, these may be payments from clients or money you may have lent your business, separate the two, if necessary write an email explaining what has taken part in the description column. (explained later).
It is also important to keep a running stability as well after each transaction has been entered, this way you know exactly what you offer in the bank, just looking at the financial institution statement is not enough there might have been unpresented cheques you may have forgotten regarding or thought had gone through, this will obviously give you false information and perhaps embarrassing moments when cheques are usually returned through insufficient funds.
Make use of the cashbook to record often continuing expenses, eg bank fees, energy, loan payments, purchases, repairs plus maintenance, etc . when totalled in late the week or month you will have basic summary of where your money has been spent, a few adjustments therefore you have a GST or tax workpaper that you can give your accountant or perhaps do yourself.
The type of cashbook We are advising for you is for your main company cheque account only, do not get into the trap of putting other bank account dealings in with it, keep in mind this is an analysis of your cheque accounts only. You need to create a separate cashbook for each bank account or credit card accounts you own.
You don’t need to be fancy when making a cashbook but , make sure it balances at end of each 30 days with the Bank statements, otherwise the a waste of time, there might have been an error somewhere!!
Don’t forget to describe or code each transaction, you may need to ask your accountant for a list of rules, and have an understanding of what the requirements mean. (If you are not sure an over-all description will do). Another way of obtaining codes is to go through your last years financial accounts and pick out the most obvious or ones you know have the most transactions in. Issue is your first year just make a listing that best describes the cost, does not have to be technical as long as you know what they are.
If you beloved this article and you simply would like to be given more info about 소액결제 nicely visit our own internet site.
Keep the cashbook reconciled to your bank statement there is nothing more frustrating plus time wasting ($$$$) for both parties ( owners and accountants) when chasing up unnecessary queries, in fact you are paying for his/her time to do that, so be accurate when finishing the cashbook.
Basically the Cash guide may be computerised (simple cashbook program) or a manual multi column report book. Benefits will far surpass costs in this area if completed accurately and timely.
Creating a ledger kind cashbook, you will need quite a few columns going right to left, the first two columns are for total cash in and out and third column is for the balance, always start with an starting balance at top of web page, if you are accounting for tax after that use next column, the remainder content are for your expenses ( code listing) these may be net of tax or include tax, but make sure the total of the expenses as well as the tax agrees with the total out in the second column. At end of the month make sure the additions when adding across, tie in with the additions down, for example when adding up total payments column for the month the total with this must equal the sum of the costs to the right Also on the considerably left leave room for an explanation of the transaction.
At the end of the 30 days go through your bank statements put in any direct fees or automatic payments, tick off presented cheques and reconcile to the statement.
Reconciling to the statement just take the cashbook balance, add on unpresented cheques and deduct deposits not yet upon bank statement. This should then tie up with your bank statement.
When all the columns have been added you will have an analysis of what has been used on what for the month. Doing this with all the reconciliation on the page saves the accountant from having to analyse your own bank statements, which can be quite time consuming and expensive.