Topic: Always Have a financial record in whatever business you own (Read 1321 times)
Even if the business is sole proprietorship, every item of that business should be accounted for. I have an uncle who is my age. He owns a clothing business and sometimes I visit his clothing store. But I notice one thing, since the shop is his own, he keeps a note of the products sold in the shop as soon as they are sold. After following this incident regularly for a few days, I suddenly asked him one day, "uncle, is this shop yours? After selling everything, do you note the account of each product in the ledger?" He replied to me that the account was not worth sustaining my shop. Maybe the shop is mine but if I don't keep the product accounts properly I won't know the profit and loss amount which makes it impossible for me to sustain this shop. Then I realized how important accounting is in business.
It seems a bit weird that you had to educate this person on financial records, when it is pretty much demanded by the tax authorities in every country to have proper accounting. Otherwise you end up in a grey area which can easily be misconstrued as you trying to avoid taxes or even worse - money laundering offenses. If this person had been around for at least a couple years they should have been paying taxes and to do that, you need to know your incomings and outgoings. With that in mind, some people pay accountants to deal with the nitty gritty details, especially if they're in fields where they make a lot of money or once the company starts to expand but it is necessary to know these basics things to determine if you're making any sort of profit.
In some countries there are no proper taxation systems. Most citizens of developing nations don't pay tax. Even if they pay it is not properly calculated and corrupt tax officials also use tax collection as opportunities to steal. Like in my country only civil servants and registered businesses are require to file tax statement. So most businesses don't keep records and these businesses don't know their financial standings. It was the opposite for us; it is required to have financial records as you are an illegal business if you don't have them, as this is required before having a permit to operate. That is why it is important, but the problem starts because most of them are handwritten, so they can be cheated, like if you wrote a total of $25k rather than $50k because they are just handwritten, which means they can be easily manipulated, and you really needed to declare it to the tax department so that they can introduce you to how much you are paying monthly or quarterly.
It seems a bit weird that you had to educate this person on financial records, when it is pretty much demanded by the tax authorities in every country to have proper accounting. Otherwise you end up in a grey area which can easily be misconstrued as you trying to avoid taxes or even worse - money laundering offenses. If this person had been around for at least a couple years they should have been paying taxes and to do that, you need to know your incomings and outgoings. With that in mind, some people pay accountants to deal with the nitty gritty details, especially if they're in fields where they make a lot of money or once the company starts to expand but it is necessary to know these basics things to determine if you're making any sort of profit.
In some countries there are no proper taxation systems. Most citizens of developing nations don't pay tax. Even if they pay it is not properly calculated and corrupt tax officials also use tax collection as opportunities to steal. Like in my country only civil servants and registered businesses are require to file tax statement. So most businesses don't keep records and these businesses don't know their financial standings. some people just earn the money and do not keep the record this damages their business and doesnt know how to deal with finances
Illiteracy is another reason why people don't keep records. Some people don't know how to read and write, so it affects their ability to keep records. But one of the solution is to employ a financial records personnel. But small businesses might not be financially strong enough to employ workers. But every business owner should be a prudent spender. You should be able to know your income so that it will determine your expenses. 
Having a financial record is essential for any business owner because it provides valuable information about the financial health of the company. Keeping financial records can helps with budgeting and forecasting. By keeping track of income and expenses, business owners can create a budget and forecast for future cash flows. Financial records provides insights into the financial performance of the business, allowing owners to make a good decision about investments, expenditures and pricing. Maintaining accurate financial records helps businesses comply with tax laws by providing documentation of income and expenses. Lenders and investors require financial records to evaluate the credit worthiness of a business and determine the terms of financing. In the event of an audit or legal dispute, having accurate financial records can provide evidence to support the business's position. Maintaining financial records is crucial for any business owner who wants to make a decisions, comply with tax laws and secure financing.
I had this barber friend in a neighboring hood I lived a few years ago who is a very good barber and has his own barbershop. He does home service from time to time too. He’s really good so he has a lot of customers but at the end of the month he always struggles to pay the rent of his shop. I spent most of my free time with him at his shop so I know the number of customers that walk in for a haircut daily and I know what his rates are, so by calculations, he should be making enough money even after rent and other expenses required to run the shop. So one day when he complains about rent I asked him how much he makes in a week and he couldn't tell me an estimated number.
Long story short, I educated him on how to keep financial records and record every single penny that comes in and goes out of his business. I also made him understand how this can help him cut losses and make more profit.
Long story short, I educated him on how to keep financial records and record every single penny that comes in and goes out of his business. I also made him understand how this can help him cut losses and make more profit.
It seems a bit weird that you had to educate this person on financial records, when it is pretty much demanded by the tax authorities in every country to have proper accounting. Otherwise you end up in a grey area which can easily be misconstrued as you trying to avoid taxes or even worse - money laundering offenses. If this person had been around for at least a couple years they should have been paying taxes and to do that, you need to know your incomings and outgoings. With that in mind, some people pay accountants to deal with the nitty gritty details, especially if they're in fields where they make a lot of money or once the company starts to expand but it is necessary to know these basics things to determine if you're making any sort of profit.
I had this barber friend in a neighboring hood I lived a few years ago who is a very good barber and has his own barbershop. He does home service from time to time too. He’s really good so he has a lot of customers but at the end of the month he always struggles to pay the rent of his shop. I spent most of my free time with him at his shop so I know the number of customers that walk in for a haircut daily and I know what his rates are, so by calculations, he should be making enough money even after rent and other expenses required to run the shop. So one day when he complains about rent I asked him how much he makes in a week and he couldn't tell me an estimated number.
Long story short, I educated him on how to keep financial records and record every single penny that comes in and goes out of his business. I also made him understand how this can help him cut losses and make more profit.
Long story short, I educated him on how to keep financial records and record every single penny that comes in and goes out of his business. I also made him understand how this can help him cut losses and make more profit.
It seems a bit weird that you had to educate this person on financial records, when it is pretty much demanded by the tax authorities in every country to have proper accounting. Otherwise you end up in a grey area which can easily be misconstrued as you trying to avoid taxes or even worse - money laundering offenses. If this person had been around for at least a couple years they should have been paying taxes and to do that, you need to know your incomings and outgoings. With that in mind, some people pay accountants to deal with the nitty gritty details, especially if they're in fields where they make a lot of money or once the company starts to expand but it is necessary to know these basics things to determine if you're making any sort of profit.
If we think that we will continue to grow our business then what we have to do is record a balance sheet, of course we don't have to pay employees who specifically monitor financial flows, but we can do this ourselves with excel or an application on android that we can download for free.
Keeping financial records in written form is a great way to keep the records hand and also if the financial deal is between two people. It is great to deal with written records. Otherwise most of the time the deal end in disasterOne should use a cloud service or a drive like Google drive to keep their important files and business records so that if something goes wrong with the computer that they are using at work, their data stays safe and they can easily get it back even on another device.
It will help you in audit and to track the record
If we think that we will continue to grow our business then what we have to do is record a balance sheet, of course we don't have to pay employees who specifically monitor financial flows, but we can do this ourselves with excel or an application on android that we can download for free.
Keeping financial records in written form is a great way to keep the records hand and also if the financial deal is between two people. It is great to deal with written records. Otherwise most of the time the deal end in disasterOne should use a cloud service or a drive like Google drive to keep their important files and business records so that if something goes wrong with the computer that they are using at work, their data stays safe and they can easily get it back even on another device.
The advice you gave your friend is good. Having a record breakdown in a business is really important. So we can see the incoming income and outgoing expenses. This is where you will know immediately what you should do if you are the one managing a business.
And it's also right to have lists of things that should and should not be bought, especially for business and personal things, maybe because later on we don't realize that what we earn in business is being moved and spent on things that don't make sense. or significance instead of being saved as savings for the future.
And it's also right to have lists of things that should and should not be bought, especially for business and personal things, maybe because later on we don't realize that what we earn in business is being moved and spent on things that don't make sense. or significance instead of being saved as savings for the future.
As a businessman who has a long -term vision and wants businesses to develop, it is time to record the financial streams that occur, do not fall asleep even if they are profit so that they do not know how much profit is obtained, with good records it can make the business greater.
The most difficult thing in business is that in the first 3 years, there is no business that is immediately successful, especially if we are still new and have no experience in the business, patience and of course capital is important so that we can succeed in business.
there are a lots of benifits of keeping the records in written. Firstly it helps track the progress of your income . you wont regret keeping the writte records because this will be very helpful when you will be return your tax and will process your audits
The most difficult thing in business is that in the first 3 years, there is no business that is immediately successful, especially if we are still new and have no experience in the business, patience and of course capital is important so that we can succeed in business.
Usually, when the business is at the stage of rapid development, the founders of the company are careless about the issue of maintaining management and financial accounting.
At this stage of business development, other points are important - the speed of making managerial decisions, healthy aggressiveness, a small close-knit team, informal contacts with employees and contractors.
However, as the business develops, the situation changes dramatically. Business stops growing. The income of the organization / individual entrepreneur ceases to grow. To maximize profits, balanced management decisions are needed. The issue of cost optimization becomes relevant.
At this stage of business development, the preparation of voluminous management and financial statements becomes the main goal of the organization (or entrepreneur).
At this stage of business development, other points are important - the speed of making managerial decisions, healthy aggressiveness, a small close-knit team, informal contacts with employees and contractors.
However, as the business develops, the situation changes dramatically. Business stops growing. The income of the organization / individual entrepreneur ceases to grow. To maximize profits, balanced management decisions are needed. The issue of cost optimization becomes relevant.
At this stage of business development, the preparation of voluminous management and financial statements becomes the main goal of the organization (or entrepreneur).
Proprietary business always needs to keep a specific account so that at the end of the month you can understand whether your business has made a profit or a loss. Due to not keeping financial accounts of the business, many times the businessman has to face a lot of trouble with these issues. You understand that your business is making a lot of profit, but seeing that you are making a profit, you did not keep any account in your business, but it will be seen at the end of the month or if you calculate annually, you will see that your business is showing a loss even if you make so much profit every day. Even if the business is one's own, every aspect of this business should be accounted for. Because this daily calculation will help you in yearly calculation.
If we think that we will continue to grow our business then what we have to do is record a balance sheet, of course we don't have to pay employees who specifically monitor financial flows, but we can do this ourselves with excel or an application on android that we can download for free.
Keeping financial records in written form is a great way to keep the records hand and also if the financial deal is between two people. It is great to deal with written records. Otherwise most of the time the deal end in disasterOne should use a cloud service or a drive like Google drive to keep their important files and business records so that if something goes wrong with the computer that they are using at work, their data stays safe and they can easily get it back even on another device.
Also it is great idea to discuss all the financial records in
consideration.
If we think that we will continue to grow our business then what we have to do is record a balance sheet, of course we don't have to pay employees who specifically monitor financial flows, but we can do this ourselves with excel or an application on android that we can download for free.
Keeping financial records in written form is a great way to keep the records hand and also if the financial deal is between two people. It is great to deal with written records. Otherwise most of the time the deal end in disasterOne should use a cloud service or a drive like Google drive to keep their important files and business records so that if something goes wrong with the computer that they are using at work, their data stays safe and they can easily get it back even on another device.
Each country will have different laws, but there is no denying that they are increasingly trying to tighten regulations and requirements for businesses to have the appropriate licenses and permits. So it affects a lot of businesses, especially small or established businesses. Moreover, the fact that they also strongly increase the application of taxes is also one of the big challenges for these businesses because, with more and more advanced technology, the application of digitalization in taxes for easy management is also important. such as tightening the possibility of tax evasion. That's why the government is profitable when more and more new businesses are born.
Keeping a financial record is good because it will help you determine if the business is successful or not. You doing your income and expenditure daily will give you an insight into how the monthly one will look like and also teach you some practical things you need to do. For instance, cutting down your expenses and saving more.
records of everything should be kept safe because in life if you continue your journey without any planning or records so it will become difficult for you one day to manage your expenses and to make your financial status easier. By keeping record it will be easy for you to minimizes your expenses and to save some amount of money for future use and I think those businessman will be more successful who keep records of each and everything as it provides a smooth way of business.
Things like this do seem like trivial things, but when we ignore them, they will have a big impact on the business we run. Financial records are one of the determining factors for our business, because from there we can see the progress of our business every month, week or even every day. That way we can continue to evaluate so that our business becomes bigger and more advanced.
Financial management is important, not only in running a business, but it is also very important in our daily lives, so make it a habit for us to continue doing it from the smallest things, such as in the personal or family sphere.
Financial record obviously when having a business is a must, so you can track )(1)if the inventory of your sales per day is correct, (2)to track your profits weekly or monthly, (3) to know what to adjust in order to meet your daily expenses in your business.
Actually there's a lot of advantages when you record all your financial things in your business, but for me that's the main reasons why any businessmen or businesswomen do it.
it is a great thing to keep the financial record handy. Actually there's a lot of advantages when you record all your financial things in your business, but for me that's the main reasons why any businessmen or businesswomen do it.
once you are used to it, you will be happy and will thank yourself for being able to make this your habit. One of my friends even make a stamp paper of any deal which he does with contractor
Financial record obviously when having a business is a must, so you can track )(1)if the inventory of your sales per day is correct, (2)to track your profits weekly or monthly, (3) to know what to adjust in order to meet your daily expenses in your business.
Actually there's a lot of advantages when you record all your financial things in your business, but for me that's the main reasons why any businessmen or businesswomen do it.
Actually there's a lot of advantages when you record all your financial things in your business, but for me that's the main reasons why any businessmen or businesswomen do it.
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