Simple Tips to maintain Accounting

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

1. Keep all the family members in sync of procedure.
2. Ignore the paisa if you find it difficult to remember the exact amount.
3. Follow a fix pattern of review and data entry.
4. Keep records at one single place with single person maintaining them.
5. 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:

1. utility bills – electricity, mobile, gas lines,
2. Vendor accounts- milkman, newspaper, laundry, AMC contractors
3. bank statements , credit/debit card details and so on others
4. 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

Saarthi Financial Planner

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