Many new entrepreneurs are happy to start their own businesses. Some are glad because they avoid the normal eight to five rush and traffic. Others because they get to be in charge and manage things the way they prefer. How many are able to maintain their businesses for long? Most businesses get bankrupt or highly in debt due to poor maintenance of accounts. So how do you maintain your daily accounts to keep in business? Here are some actions you can take.
Have a focus:
Before you begin your business have a focus or forecast the future direction of your business. Predict how you will like to use moneys that come in and your financial status within a period of time. Say, the next three months, six months or ten months. Short term focuses are realistic and highly achievable. If you set too long time, say one year plus, you may not be able to check your accounts before it gets out of hand. It may be too late.
Keep accurate records:
Record keeping is very essential because it helps you analyze your trend as a business. Are you going up in profits or high in expenditure? You can keep a personal diary alongside your main accounting books. You can get a quick estimate from the diary frequently to give you an idea of your progress. Make sure you keep track of all capital, expenditure and profits or losses.
Check at the end of everyday your profit or loss. Do not be disturbed if you have some losses, it is normal for the beginning stages of a business. After three months, however, you should see an improvement, that is, if it's a small scale business. There should be profits even if it's not so high. If after three months you still record losses, then you have to review your business plans. Check if you are actually in line with your focus periodically.
Keep adequate balance:
Try as much as possible for your expenditure not to exceed your income or profits. Cash inflows must be more than cash outflows at least for every quarter of your business year. Plan to always keep an adequate balance with your accounts. Daily review your budget to go along your actual income. You may not be exactly balanced but the tilt should not be too much in the negative. If that happens revise your focus.
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