How to Do Daily Business Accounts

Instructions

• 1

  You will need to hire an accountant who takes care of all day-to-day transactions. Depending on your business model, he will decide whether to record transactions on cash or accrual basis. In the former accounting method, all transactions are recorded when the cash changes hands i.e. when you pay money for purchases or receive payments from the sale of your product. In accrual accounting, the transaction is recorded regardless of whether you have received or given money. More often than not, book-keeping is performed on an accrual basis where you either sell or purchase on credit.
• 2

  Now create an accounting list of transactions you will be incurring on a daily basis. This will essentially include sale receipts i.e. the income received from the sale of your product or service, expenses where you purchase certain items and all costs incurred by your business. You will need a basic cash account which enlists all transactions where money changes hands. For non-cash purposes, you will create accounts receivable and accounts payable, where you make credit sales or purchases.
  
  If you have different product lines, you may be required to prepare separate accounts in order to gauge the performance of each product when compared with another.
• 3

  Now record the transaction by entering the respective values. For every debit entry, there will be a corresponding credit entry which is the fundamental of an accounting transaction. Debit reflects the increase in value of business related assets and expenses, along with a decrease in liabilities and equity. Credit works the other way round, where a decrease is realized to an asset and expense account. All these accounts will be T-shaped and the information will be then transferred to the general ledger.
  
  For greater purposes, these transactions will then help in the creation of financial reports such as Profit and Loss statements, income statements as well as the balance sheet.