Last week my husband was checking his bank account credits for hours
to understand the outstanding credit of one of his client.With so many
entries and rolling on pages, it was a tiresome for him to figure out
the actual number. I asked him why doesn’t he simply extract the
client ledger snapshot and send it to his client. He looked startled and stared back at me in a confused way. I knew this look; it was usually
visible when I spoke anything related to accounts or book keeping. He
asked me “why don’t you help me out to pull it. I am a non-commerce student and haven’t had the need to learn it”.
So, I thought this might be a problem with many of the families, where
it is difficult to track the daily expenses and cash movement. So, today
we would discuss a few simple methods to track your expenses
and cash account.
A few guidelines before you start
- Keep all the family members in sync of procedure.
- Ignore the paisa if you find it difficult to remember the exact amount.
- Follow a fix pattern of review and data entry.
- Keep records at one single place with single person maintaining them.
- Use fixed code language to save time and allow account privacy.
Simple steps to follow:
Record your expenses
Keep two different records for your cash and non-cash expenses i.e credit card, debit card or cheque expenses.
Prepare a list of your ledger accounts.
A ledger is basically a record stating amount to be received or paid on a particular date. you can use the conventional method of note book or any other spread sheet available online. We can use various heads as follows:
- utility bills – electricity, mobile, gas lines,
- Vendor accounts- milkman, newspaper, laundry, AMC contractors
- bank statements , credit/debit card details and so on others
- Cash account – include your ATM withdrawals
A
ledger is basically prepared by dividing the sheet into halves- on left
side is amount to be paid and on right side is amount to be received. To
this you can add details like date, details about the transaction and
mode of payment. For every expense you add the word “to” standing for
towards to describe it .For any income we start with "by” to stand for
source of income. This ledger can be reconciled by checking the respective
expenses. Ledger accounts are preferred to be made mainly for Personal
accounts- i.e. for people (who can be taken to court for trial) and not
for services.
Tally your accounts
Every
expense made would have a corresponding entry in either your cash
account, bank account or through your card. So, match all expenses with a
corresponding entry in your individual account. Similarly, all your
payments would be adjusted as income towards your services provided.
This
week we have discussed about expenses, later we would look at assets
and liabilities. This is simple way to record your expenses without any
further worry. KEEP Recording and Analyzing your Funds.
Thanks and Regards
Team
Email: saarthifp@gmail.com
