How to Compile Business Expenses & Receipts

A smart small-business owner records credit card purchase into his accounting software.

Compiling business expenses and receipts is not a complicated managerial task but does require proper planning and organization on the part of the business owner. To maintain accurate daily records of all business transactions, a business owner must adopt an accounting system capable of keeping track of all sales and business-related expenditures for the day. Although a business owner might use an accountant to file taxes at the end of the year, the day-to-day record keeping of business activity should be managed by someone directly employed by the business or by the business owner proper.

Things You'll Need

• Sales and cash receipts journal
• Cash disbursements and purchase journal

Instructions

Sales and Cash Receipts Journal

1. Create a date column in your journal. Record the date of each sale in the rows below your date column heading.

2. Create an account description column beside your date column. Record the type of sale next to the date on which the sale occurred in the rows below the account description heading. For instance, you might record "AJ's Hardware purchased stainless steel work bench" beside the date on which the sale occurred, June 23, 2010.

3. Create an invoice column beside your account description column. Record the invoice number for each sale transaction that corresponds to the account description in the rows below the invoice column heading. The invoice number is a unique number used to keep track of each item you sell.

4. Create a cash debit column beside your invoice column. Record in the rows below the cash debit column heading the total cash payment received for each sale transaction.

5. Create an accounts receivable column beside your cash debit column. Record in the rows below the accounts receivable column heading each sale transaction that was paid for on credit.

6. Create a sales tax column beside your accounts receivable column. Record in the rows below the sales tax column heading the amount of sales taxes paid for on each sales transaction. For instance, a 5 percent sales tax on a $100 sale would be recorded as $5 (100 X 5% = $5.00).

Cash Disbursements and Purchase Journal

1. Create a date column in your journal. Record the date of each purchase or cash disbursement your business makes in the rows below your date column heading.

2. Create an account description column beside your date column. Record the type of purchase or cash disbursement your business made next to the date on which the purchase or cash disbursement occurred in the rows below the account description heading. For instance, you might record "purchased five PCs from Computer Store" next to the entry on which the purchase occurred, September 23, 2010.

3. Create a cash debit column beside your account description column. Record in the rows below the cash debit column heading each purchase or cash disbursement your business made that was paid for in cash.

4. Create an accounts payable column beside your cash debit column. Record in the rows below the accounts payable column heading each purchase or cash disbursement made by your business that was paid for on credit.

Tips & Warnings

• Consult a certified public account before you decide to adopt an accounting system for recording daily business transactions. You will want to create a record-keeping system tailored specifically to your business's needs.

References

• Cliff Notes: special journals