How much profit did you make last month? Eeermm…I’m not really sure but I know I sold a lot, really, I even had to call my vendor three times this month. I just need a little money to pick up my order from them.
Is that your story too? Keeping the books is very important for the growth and sustenance of your business.
I don’t have money to hire an accountant. Calm down I’m not asking you to do that now- You might have to do it later when your business expands.
We are going to deal with the simple ones first. I’m going to talk about the manual version and in another blog post, we would talk about applications that can make your work easier.
You are reading this blog post, so I am going to assume you have a phone, a laptop or a desktop that access to the internet. Open a google doc/ spreadsheet or Microsoft word/excel anyone that suits you and if you do not have any of that you can just get a note pad. It would do the same job.
First, take an inventory of what you have in this format and if you are just about to start your business, use the same format for your first stock.
Second step; when you sell any of the items recorded above. Record it in this format-
Third step; when you make any expense related to the business that does not involve you buying new goods you put it in this format-
To know your Net Profit at the end of the month;
Total Second table Profit — Total Third table Expenses
That is your net profit for the month. Now do not be discouraged if the amount is small, remember some of your money is still tied up in inventory.
P.S If all this is too much for you and you need a list of applications or software that can help you with this click here.