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How to handle your accounts in 7 simple ways?
07
July
2016

Most companies feel painful when comes to book-keeping especially new startups with little or no

budget on hiring accountants. If you do not own any simple accounting software (eg. MYOB

Accounting Software), adopt the following simple way will simplify the job.

 

1. Do it daily!

Accounting works are made up of small little bite-size tasks. A lot of people actually likes to put it

aside and accumulates till mountain high.

Cultivate a habit to complete all the tasks immediately, don’t wait! It takes only less than 3

minutes to issue a payment voucher or update the cash receipt into cash book. However, if you

accumulate, you will not only lose appetite of doing it but also possibilities of losing vital

documents and lost memory on certain transactions.

 

2. Use simple Excel if you do not have a software

Update all your transactions in a simple excel spreadsheet cash book if you do not have an

accounting software. Just 4 columns will give you a clear picture,

1. Date of Transactions

2. Details of Transactions

3. Amount

4. Balance in the Cash Book

You may also create another one for petty cash. Having a simple cash book will give you exact

cash situation which is extremely important in business.

 

3. Use payment voucher to record all outgoing payments

You can get pre-printed payment vouchers in bookstore and use that to record all outgoing

payments to suppliers. It keep tracks of date of payment, amount paid, mode of payment

(cheque or cash) and signature of recipient.

Make sure you serialize the payment voucher by using a series of running number such as

PV1001, this will keep all the documents in order and detect document loss easily.

 

4. Use internet banking instead of issuing paper cheque

If you do not have an internet banking facility, go and apply one now immediately. Internet

banking saves lots of time by avoiding long queue at banking hall. Most importantly, internet

payment transfer save you at least 10 minutes of cheque preparation, writing address on

envelope, putting on stamp and drop it in post boxes.

One last thing, internet payment transfer leaves you a trace and you will not face “lost in mail”

kind of situation!

 

5. Compare your transaction with Bank statement on Monthly basis

Spend 15~20 minutes to reconcile your bank statement with your cash book once you receive it

from the bank. This will reaffirm your record tracking as well as detecting mistake earlier. You

may also discover some extra charges imposed by banks as some banks do not send

notifications.

 

6. Do not contra

When you purchase and sell to the same company, do not contra payment and receipt! It seems

logical to make single payment or receipt after contra, however, it creates much confusions and

eventually, spending more time in reconciliation.

The easiest way is to pay straight. Should you worry about bad debts? Perform a cheque swap.

 

7. Number your documents

Use single series of running number for official documents, sales invoice for example. Each type

of document should have its own running numbers. The numbering will help to detect document

loss and quicker filing and searching of documents.

If you still think it is difficult, hire a reputable accounting company or book-keeper to maintain

your books on either monthly, quarterly or yearly basis. Outsource non-core activities save you a

lot of time and let you focus on what you are best at.

Ruby -
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