Small businesses and startups are usually faced with the dilemma of either employing an in-house accountant or outsourcing their bookkeeping. No matter the choice made, there are certain basic bookkeeping that startups must have as records. This article discusses some of them.
Trade Receivables Schedule
This helps keep all the customer records, especially those owing. From this record, the total amount of debts customers owe is known. From it, you can pick out the actual amount a customer owes instead of guessing it. Aside from these, the names of customers can be found and the number of times within a year they have made business deals with the startup.
Trade Payables Schedule
This book is kept for suppliers. It is similar to the trade receivables schedule, only that it is for suppliers or vendors. From it, you can tell the due dates for payments to vendors without waiting for them to send reminders.
Petty Cash Book
Not all expenses that a bank transfer must be done from the company's core banks. Also, it shouldn't be every day the cashier or someone representing such a position would have to go to the bank to withdraw cash for expenses. Especially for small expenses, the entity can decide to keep a specific amount of money every day with a junior staff for small expenses.
The transaction is recorded in a petty cash book. Therefore, the expenses made with such money can be tracked and reported so that everyone involved knows how the amount of money is spent.
Bank Accounts
Another important bookkeeping record is the bank account. Startup entrepreneurs should ensure that the bank account of the company is different from their personal bank account. This is to avoid regulation issues. Bank accounts serve dual purposes. It records the business transactions by applying double-entry principles and can be used as a source document.
Monthly Revenue Collection
Revenue earned daily is recorded on a sheet. This gives some details that may not be found in the trade receivables such as the kind of goods brought or the type of service rendered to the client. At regular intervals, what's on the monthly revenue collection report will be entered into the trade receivables schedule.
Fixed Assets Register
The fixed asset register (FAR) contained all the property, plant and equipment (PPE) of the organization. Every month, staff should check the assets to ensure that the PPE exists and is in good condition. A FAR report will also contain the computation for depreciation, accumulated depreciation, and carrying amount.
Inventory Movement Book
This helps track inventory and other supplies as they are bought from suppliers and transferred to other departments. A separate inventory worksheet should record the finished goods inventory. This is for startups that are into manufacturing. At the end of the month, the total inventory in the worksheet should be equal to that on the shelf or warehouse.
At the end of the month, the data on these books are sent to the accountant, if it is outsourced, to prepare the management report. For an in-house accountant, he or she will have access to the data to prepare the report. However, a company that can afford software may decide to use one instead of keeping separate worksheets for different transactions.
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