One of the best practices in managing a business is to separate finances between business money and personal money. This is so that business money is not used for personal needs or vice versa, personal money is not used for business purposes. If it is mixed, it will be difficult to measure whether the business being carried out is growing (increasing in wealth) or decreasing.
The easiest way is to separate the storage. For example, business money is stored in a special money box and stored at the business location. Meanwhile personal money remains in the wallet. Quite simple actually the solution. Simple but that doesn't mean it's easy to be consistent.
There will be a condition where personal money is forced to be used for business purposes. The most frequent example is when there is a transaction that requires change but there are no small denominations in the business. Usually the money in the wallet is "borrowed" temporarily to give change. Or vice versa, the son of the business owner will pay school fees, and easily take the money from the cashier.
The conditions above are very likely to occur, especially in micro and small scale businesses . However, it does not mean that financial separation cannot be done consistently. The trick is to always record / book business transactions, whether using business money or borrowing from personal money.
What we do:
1. Keep money separately as much as possible.
2. For cash disbursements for business purposes, either using business money or personal money are always recorded as business cash expenses. Not the source of the wallet that is seen, but see its use. Regarding business or not
3. Routinely check the company's cash balance recorded in Sleekr Accounting . Make sure there is really that much money. If it is not enough, it must be added with personal money because it means that it was used for personal use. Likewise, if the physical money is greater, it means that there are business expenses that use personal money. Do not let physical money be smaller because this means business money is borrowed. Must return it immediately. But still try to be number 1 consistent.
Sleekr Accounting, helps produce sales and purchase reports for SMEs in a comprehensive and easy way. These SME sales and purchases reports are used to monitor SME business activities . Sleekr Accounting helps manage cash management better for SME businesses, both trading, service and manufacturing businesses. Register for Sleekr Accounting now and create sales and purchase reports for your UKM easily and quickly with Sleekr Accounting .
The easiest way is to separate the storage. For example, business money is stored in a special money box and stored at the business location. Meanwhile personal money remains in the wallet. Quite simple actually the solution. Simple but that doesn't mean it's easy to be consistent.
There will be a condition where personal money is forced to be used for business purposes. The most frequent example is when there is a transaction that requires change but there are no small denominations in the business. Usually the money in the wallet is "borrowed" temporarily to give change. Or vice versa, the son of the business owner will pay school fees, and easily take the money from the cashier.
The conditions above are very likely to occur, especially in micro and small scale businesses . However, it does not mean that financial separation cannot be done consistently. The trick is to always record / book business transactions, whether using business money or borrowing from personal money.
What we do:
1. Keep money separately as much as possible.
2. For cash disbursements for business purposes, either using business money or personal money are always recorded as business cash expenses. Not the source of the wallet that is seen, but see its use. Regarding business or not
3. Routinely check the company's cash balance recorded in Sleekr Accounting . Make sure there is really that much money. If it is not enough, it must be added with personal money because it means that it was used for personal use. Likewise, if the physical money is greater, it means that there are business expenses that use personal money. Do not let physical money be smaller because this means business money is borrowed. Must return it immediately. But still try to be number 1 consistent.
Sleekr Accounting, helps produce sales and purchase reports for SMEs in a comprehensive and easy way. These SME sales and purchases reports are used to monitor SME business activities . Sleekr Accounting helps manage cash management better for SME businesses, both trading, service and manufacturing businesses. Register for Sleekr Accounting now and create sales and purchase reports for your UKM easily and quickly with Sleekr Accounting .