Keeping Accurate Records

All the Vital Records you Need to Keep
A basic record keeping system should be one that is easy for everyone to understand and use. It must also be reliable and accurate and consistent if the information that it supplies is to be relied on.

A basic system will include the following types of records:
  • Records that record your cash in and cash out
  • Records that record all check and credit card transactions used in the business.
  • Records that record your sales
  • Records that record all costs.
  • Records that record people that you sell to and that owe you money
  • Records that record your purchases
  • Records that record all dealing with outside agents and consultants.
  • Records that the suppliers that you owe money to
  • Records that record your staff and the wages or salaries that they are paid
  • Records that records the small cash expenses that run through your petty cash system
  • Records that record your stock on hand and the various lead times for obtaining more
  • Records that record all your plant, equipment, machinery etc
  • Records that record all the assets and liabilities of the business
  • Records that enable Sales Tax and tax to be easily calculated and paid.
  • Records that record the financial results of the business during any particular period
  • Records that enable the end of year financial accounts to be completed.

Records to record Cash - Check - Credit Cards 
The main record used for this is known as a cash book. This is a book that records all the cash coming in and all the cash being paid out. These transactions are all run through the business bank account. The cash book is probably the prime record that records all the financial transactions of the business and it is important that the owner of the business is able to obtain knowledge about how a cash book operates.

The cash book serves certain functions.

These are:
  • Records all receipts and payments whether coming in via check or cash.
  • It helps you to reconcile your records with that of the bank.
  • It keeps an eye on your cash flow so you know how much money you have at any time.
  • It records the names of the parties which have sent you money and the names of the parties who you pay money to.
  • It is the essential record that the IRS needs to view at times if it wants to query any transaction that involves cash or cheques.

Records for Bank Transactions 
Every business needs to have a bank account. This should be set up by you, right at the beginning, before you open your doors and commence operation. When you open up a bank account you should also ask for a check book as well as a deposit book. The check book is what you use to pay your bills and the deposit book will be used to bank money that your business receives.

A check book is essential because it provides you with a record of your payment and if it is used properly, will assist you to keep an eye on your cash flow. The deposit book will do the same thing, in that the details of the money received and banked will be recorded on the butt of the deposit book itself.

The bank statements are a record of your account with your bank. It records the inward movement of cash into your account and the outwards movement when payments are made. It also shows the balance of your account with that bank. Included also are other transfers, bank charges and fees which the bank charges. The end result is that the balance shown in the bank balance is what your bank says your business holds with them.
You need to keep all your bank statements because that will be required for other processes such as reconciliation of your account records with the bank (known as bank reconciliation).

Example of Bank Reconciliation

Alpha company
Bank Reconciliation
March 31, 2000
Balance as per Bank Statement

Deposits in Transit

Date Amount


Outstanding Checks
Check Number Amount


Balance as per our Books