What you need to know to organize your company’s accounts
The question “how to organize my company’s accounts?” always appears in the mind of small, medium and even big businessmen. It is common, if there is not a good organization and people who work for this to be done, that the numbers, expenses and revenues are lost in the middle of the routine and end up disorganizing the entire cash flow of the company
In this article we will give you some tips on how to organize a company’s accounts in an easy, simple and efficient way. The basic idea of this publication is to help entrepreneurs to, in fact, know how to organize themselves and escape the cliché tip of: “Be disciplined and be organized”.
So let’s get down to business?
1) Start with cash flow
We know that for every four companies created, one of them ends its activities before completing two years of life. What does that mean? The reasons for this to happen are the most varied, but one of the big reasons is the lack of control of the cash flow of small companies.
The mastery of cash flow is essential for companies in any segment. The central idea of good use of cash flow is to track and control your money. It is necessary to be sure of the amount of money that comes in and, mainly, the exact amount that goes out and what is the destination of that money.
In addition, tracking revenue and expenses will always be the best way to understand what’s working and what’s not going so well in the company. With a deep analysis of billing, the definition of goals, objectives and forecasts is much simpler and more efficient to be done.
2) Understand the difference between CFS and Income Statement
Talking about cash flow, the differentiation between the concepts of CFS and Income Statement is very important when it comes to the financial organization of companies.
But after all, do you know what the difference is?
The CFS, a cash flow statement, consists of the document responsible for recording and documenting the outflows and inflows of money in the company’s cash for a certain period. In doing so, in addition to understanding the exact amounts that come and go, we can analyze working capital precisely.
The most common financial statement is the income statement, which shows a company’s revenue and total expenses, including noncash accounting such as depreciation, traditionally either monthly, quarterly, or annually. An income statement is used to determine the performance of a company, specifically how much money it made, how much money it paid out, and the resulting profit or loss from the revenue and expenses.
These two tools and management concepts are very important in the financial organization of any company and must be used in all institutions.
3) Don’t mix personal finances with your company
A very common mistake, especially for small entrepreneurs, is to manage their personal finances with their company’s cash flow. This makes the organization process very confusing and can lead to a lack of money for both parties.
As comfortable as this may seem, it is highly recommended that you never mix personal and business finance.
4) Sales Control
Sales control is one of the main management tools for entrepreneurs. It allows the exact knowledge of the profits obtained, which products were the most sold, which did not sell as well and what the percentage of sales per period. In addition, of course, the identification and contact of each customer.
The following information may be included in the sales control:
- Date of sale;
- Product or service sold;
- Form of payment.
5) Keep a permanent inventory control
Inventory control is also very important in terms of the organization and administration of the company’s finances. The stock means money in the form of merchandise, so it cannot be stored in improper conditions and much less should it remain idle for a long time.
With the sales flow in hand, it is possible to analyze which items are coming out more and it is also possible to predict a certain demand for a specific item and, thus, obtain from suppliers more discounts on wholesale purchases or in large quantities of the best-selling products.
Controlling inventory is therefore essential to avoid wasting resources or money in business management.
6) Use technology to your advantage: use digital tools for accounting management
All the steps we talked about in this article can even be done manually, but they will certainly not be more effective than a specific digital tool for this purpose. Currently, the vast majority of companies use software and management spreadsheets for inventory control, cash flow and various other activities within the business context.
Spreadsheets for the purpose of organizing your company’s finances must be widely used by all sectors. We, from Adnia Solutions, offer the best excel templates for accounting management and work daily to further improve our products to better serve our customers.
What do you think of just entering your business data and developing self-explanatory graphs and reports automatically?
That’s what Accounts Receivable Management Template does for you.
Do not waste time, come to Adnia Solutions, we help you organize the management of your company!