Record keeping for small businesses: what to write down and how often
Every small business should record four things: sales, expenses, stock, and money owed. Write each one down the day it happens, keep business money separate from your own, and review the totals weekly.
1. Sales
Record every sale with what was sold, the price and how it was paid: cash, transfer or on credit.
2. Expenses
Record everything the business spends: stock purchases, rent, transport, data, staff pay and repairs. Without expenses you only know what came in, not what you kept.
3. Stock
Know what you have, what you bought it for and what is running low. See inventory management for a simple method.
4. Money owed
Keep a list of who owes you, how much and since when. Money owed is not cash in hand, so track it apart from your sales.
A simple routine
Every sale: record it when it happens.
End of day: compare your records with the cash and transfers you actually received.
Every week: check low stock and who owes you.
Every month: work out profit and review your prices.
Keep business and personal money apart
Use a separate account for the business, and pay yourself a set amount instead of taking money as you need it. It makes your numbers honest and your records easier to use if you ever want financing.
Keep proof
Keep receipts, invoices and transfer records. Digital copies are fine. Check the current requirements with the tax authority or an accountant for how long to keep them.