In the case something goes bad with your receivable balances, some or just one balance, they’re to be written down at least. I say “at least” because one of the options is to also write them off, meaning taking them off the balance sheet entirely. This can be done after they’re written down just as well, but let it be said that writing something down means you consider there’s still some hope whilst writing the balances off means you don’t see any collection there to be made. Continue reading
Category Archives: 2 Processes
Dealing with the fear of not getting paid for your services or goods
Every so often in running a business you end up with customers who don’t pay their debt either on time, which isn’t all that bad since they’re eventually paying still, or those who go into bankruptcy or just decide to not pay their suppliers. This one supplier may be you. Continue reading
How to distribute expenses – based on consumption or units?
It’s a question that happens on daily basis and multiple times per day in world in my opinion. There are so many expenses, which don’t even have to be fixed charges for that matter, but basing purely on consumption and yet they are distributed based on units. Or vice a versa. Continue reading
Invoices – as detailed as possible? Or not
As you set about your business, one of the things you must consider are the details you put on invoices when it comes to specifying what you’re charging the customer for. It’s always nice to follow consistency and still be thinking about the client, what they want to see on the invoice and what would benefit them. Continue reading
Showing fixed and changing charges on invoices
Being in a business where you’re charging your clients for the amounts they’ve used (hours fee etc.) and adding also a fixed charge, i.e. use of an item during this time and so on, means you’re essentially charging your customers for two separate things. Continue reading
Referencing in accounting
It’s like you made an entry into your accounts and you had your document for it. How do you connect those two? I mean yes, of course right now you know and after a short while you may still remember the document this entry is made based on, but what about tomorrow or the day after tomorrow? Will you still remember the document? I sincerely doubt it and this is why referencing was invented. Continue reading
One ground principle you must never forget
There’s no excuse for this and what’s even more, you’ve got to retain those documents for 5 or so years, depending on your local legislation. Yes. If there’s no source document for an expense than how did you know the amount to account for? Or to which account it should go to – is it really rent? I know that keeping source documents is something we’ve discussed over and over again, but it’s really important.
It’s important and yet it’s neglected and not considered as one at the spot but considerably regretted later on. Trust me on this. Keeping things on track with having source documents for each entry, referencing them properly to the entry itself and storing those documents whether physically or electronically in the end makes your life a lot easier.
So please keep this one rule in mind – have source documents for each entry. For each entry in your accounting make sure it states the sums the entry is made in, the reason for the entry or what the entry is about and most importantly that it’s also referenced to the entry (i.e. the entry has the same document number than the source document carries).