How to organize invoices and track accounts

How to organize invoices and track accounts? Paperwork is on the bottom of the list of popular activities by many business owners and managers. It takes a lot of time, and balancing receivables or payables or cash receipts ledger can become a migraine headache. Yet, failing to keep good accounting records can lead to dire circumstances. Many firms employ a CPA (Certified Public Accountant) to prepare the Quarterly and Annual Tax Forms, and those financial records kept daily and weekly are the basis of these governmental reports.

Some good steps for the small business owner or manager can include:

Make a list of all of the systems or tasks of your business. A few include the bills to pay out, also the employee payroll. Also the lists of supplies needed and the name and address of the companies you purchase from. Then there is the rent or mortgage or lease of the building you operate inside. Also you have insurance on the building and utilities.

Also you need to make a list of employees with their hourly wage or salaries, and a method of keeping track of their hours. Also the charts to compute their pay amount and the taxes and the items like insurance, 401K plan, retirement deductions they have chosen. Also there is the employer's contributions to workman' compensation and other required funds to unemployment programs etc. This list goes on and on, depending on your kind of business.

Next comes the product(s) you are selling or services performing. Supplies need to be itemized and the company you buy from as well as the terms of sales, terms of shipment to you, along with listing your stock in a location as well as on sheets so you can itemize what you have on hand, what it cost you; also a projection of when you will need more and how much more and when you should order the supply.

With some businesses, the items in the supply list could be hundreds or maybe thousands.
Also you need to compare what the item cost you and how much you sold it for, and what was your profit.

These records are a critical part of a well-run business. Then comes the payment of wages and depositing funds into accounts for taxes and so forth.

For hundreds of years, the office manger and owner(s) plus partners could do the organizing possibly. Shoeboxes were handy sized containers for the mountains of receipts that a clerical worker wrote on a ledger sheet on a regular basis.

There were accounts payable (the money the business owed to others); also accounts receivable (monies coming into the cash register and bank account). There was a petty cash account and a payroll account, and expense accounts like machinery purchases and automobile purchases and gasoline, and on and on.

All of these accounting chores were "back then".

With the introduction of computers and software designed to help a small business owner, the clerical employee can type in many pieces of data, and then when every dollar column balances, print out a cash journal, printout a list of supplies on hand with a red flag beside the items needing to be re ordered etc.

There were large printouts with row after row of data, columns of figures that were balanced at the bottom of the page or report etc. This did not last long; the books were very heavy and took up a lot of space on shelves.

Then came the specialized software for various professions; 1 kind for a gas station and another kind for a grocery store. Some for payroll and another for income tax and all tax needs. Still, 1 clerk put information on punch cards (made holes in light card stock papers about the same size as a time clock punch card.

In the 21st century, all of these chores are frequently done by 1 accounting package, 1 set of programs, which probably began with Dbase and spread sheets. Microsoft Windows includes some programs, and many other companies have designed software for computers which will add up, subtract etc and provide the owner of a business with a professional report, some even types out the pay checks and the checks for supplies and checks for the bills needing to be paid etc.

There are many very excellent software programs for sale in nearly all of the stores where computer supplies are sold. Some specialized computers come with these financial packages already installed on the hard drive (typically the C drive).

The amount of time an owner or manager needs to take now for a small business record keeping program has shrunk to probably 15% or 20% of the time needed for the same procedures 25 years ago. Typically there is higher accuracy as well.

This is how to organize your invoices and track your accounts in a manner that will be efficient and more affective for the overall success of the business.