Record keeping is the key to a successful business. The most important records you will keep for your company are the financial records. Following your company’s finances allows you to see when your peak business times occur and balance that with your planning so that you can maximize profits. A financial time line is a record of your company’s finances on a monthly basis that lets you see at a glance how, when and where you were able to get the most out of your resources and help your company to grow.
Materials You’ll Need
Accounts receivable records
Accounts payable records
Update your accounts receivable and accounts payable daily on your computer. Cross check those figures with your bank account each day when you update your files.
Subtract the total amount of your accounts payable from the total of the accounts receivable to get your estimated financial total. Record the daily bank account total to get your actual financial total. Adjust each of the financial totals each day to keep a running total for the month.
Save the monthly estimated and the monthly actual totals on a spreadsheet on your computer. Track these monthly totals on this document each month to create a financial time line for your business.
A financial projection timeline should also be kept by your company. This document shows what you plan to spend and how much you expect to profit in the months and years ahead. Along with your historical financial time line, the projection financial time line will help you to focus the operations of your business and maximize profits.
All financial records are subject to scrutiny by the IRS and other government agencies. Accurate accounting is absolutely essential.
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