Warnings Signs Highlighted by your Records
Some of the day to day things that your records will warn you of include:
- How much cash you have on hand
- How much money is in your bank account
- How much income you are currently generating
- How much income you can expect in the future
- How much you owe to your suppliers
- How much you owe for rent, hire purchase etc
- How frequently you move your stock
- How much it is costing you for your employees
- How much working capital you have at any time
- Which of your product lines are making a profit and which are breaking even
- What you gross profit and net profit is
- How your business results compare with the same period last year
- How your actual financial results compare with the financial projections that you have set down at the beginning of your business year in the business plan
7 Ingredients of a good Recording System The following are the essential ingredients in a good record keeping system.
- Simplicity
- Timeliness
- Consistency
- Accurate
- Easy to understand
- Reliable
- Complete
Recording Systems available are either Manual or Computerised
- Manual.
You can buy a manual recording system at your local stationery store or through a business advisory service or publisher. These systems consist of record keeping books and folders which can be used to physically record the transactions that run through your business. They can record such things such as cash movement, sale of products, purchases of supplies, wages paid out etc.
- Computerised.
A computerised recording system utilises the power of the computer. There are many different software packages available providing systems that can be easily operated using your basic office computer. They are designed to handle many entries and transactions as well as summarising masses of information into appropriate classifications for easy digestion. For example, accounting recording systems are well catered by software which allows transactions to be individually entered before following through various accounting processes until they arrive at your profit and loss accounts and balance sheets.