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Below you see the 5 step system of accountancy. If you are able to manage them
you will get a financially well managed company.
The first three steps are the daily routines: Basic Accountancy.
The two last steps are where the Financial Management starts.
Step 1
Make sure that you get an invoice for all financial transaction you make in
your company. When you buy goods, get a receipt. When you sell goods, issue an
invoice. When you pay out salary, make a salary statement.
Step 2
Every evening you organise the invoices, receipts, salary statements and
other financial documentation. File them in date order in a ring binder. I
necessary write a text that explains the content of the invoice if it is
unclear. This make you remember the content of the invoice when you have to do
the bookkeeping.
Step 3
At regular intervals the invoices must be entered in a bookkeeping
programme. If you have many invoices you may have to do it every day. If you
only have five invoices in a week, you can do it once a month.
If you purchase a PC bookkeeping programme you can do it yourself. You can
also outsource the bookkeeping work. Maybe to an accountant. Or to your wife,
husband or to another family member.
Step 4
All the invoices are now entered in the PC bookkeeping programme. The
programme can now generate reports. Reports about the financial situation in the
company.
Step 5
Use the different reports to look critically at your company. Does it
perform well? What can you do better? When you are doing this and acting on it,
you are performing financial management
- Go to next
business issue: What is a Financial Statement
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Copyright © 2009 Dynamic Business Plan 07-02-2012
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