Know your numbers. Numbers are daunting in class because of how they’re taught. So boring. In business it’s because you discover that numbers are the one aspect of your work where you have to be perfect. Forget your eyebrows or messing up an order. A pissed off customer can always be told nice things. Politicians do it all the time, how hard can it be?
I too have heard of the story that girls are afraid of maths. Is this you? There’s no alternative, in business, except making it a little fun. No? You can’t deny this now. Girls do just wanna have fun. In this case, it’s important because this is your only way to measure your business. Not just profit. Marketing? Productivity? All in. If you are in business with a partner, this is how you get over that trust hurdle fast. You know numbers don’t lie. And external funding. Important.
Which is why we are doing these double entry articles. It will help you improve how you prepare your everyday business records. One way is by saving money since you’ll do it yourself. The first record you formally prepare is your cash book. It’s where you note all your business cash transactions. Bought? Sold? He paid your debt as a Christmas gift? Got that chama loan? This is for that. Of course, you must still keep the receipts and invoices as backup.
The best cash book template
Now, a cash book isn’t a must. It’s a business-best-practice that pays off in those quiet behind-the-scenes ways. You’ll always have an eye on your working capital because you track spending and income as they happen. Easily, since the orderly preparation will make it convenient to reference whatever, whenever you want. Write down, don’t recall stuff. That’s how white people overtook us.
A cash book also eliminates a problem. Do you really want to risk having to access your master records all the time? Not only could you make an error, some bad eyes may see them. You know how everything is a screenshot doing rounds on WhatsApp these days.
So, how do you do it? You can use a book, a spreadsheet on your phone or computer. If you are rich, and not affected by the ban of matatus to the CBD, just use a specialized software. You can also get a free done-for-you template online; or use our simple one. What’s important is knowing what you’re doing.
A cashbook has separate entries for receipts (money in) and payments (money out). You also indicate the date and brief details of what the transaction was about. Like when you withdraw money from your business, for personal use, that’s money out. Obviously, you have to indicate amount. If you can’t help yourself, you can separate the amount that is cold cash and the one passing through the bank. Use separate columns.
Here’s our template:
Financial statements are prepared over longer periods. One tip is to prepare them monthly, quarterly and yearly. You never know who may need to see updated ones. And cash book? How often should you prepare? Do it everyday if your business involves a lot of transactions. If yours isn’t that “hot,” you can compile your info every few days.
At the end of a week or two you’ll need to total the transactions. Why? You’ll be transferring your details to a secondary record. Don’t worry, we’ll talk about it. What you must know is that the cash you remain with (if) will be the first entry of your money-in for the next cash book. That is the “In minus Out” (In-Out) on our template. All the best.