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The First Steps of Your Accounting To Open Your Company

If you want to improve decision-making or seek financing, you must learn to organize your money flows. Discover the necessary tools to do it in a reliable and updated way.

Image credit: Depositphotos.com

The best way to project your business is by measuring all the progress. If you don’t, it is difficult to evaluate and outline future projects. To do this, you must analyze the progress of day-to-day operations through accounting records that will allow you to leave a trace of all decisions about the financing and use of your resources.

What types of accounting books do I need to use?

A good book entry must be easy to make and understand, and certainly must be reliable, accurate, consistent, and designed to provide timely information.

From a legal point of view, accounting records must permanently and completely reflect the income and expenses of the company. There are various types of books and accounting systems, mainly the following:

* Double entry accounting. It is the one that most schools teach as a basic accounting course. Each operation is recorded in two accounts, of which one has to be charged or debited and the other paid or credited for an equivalent amount. This system is excellent; however, it requires an accounting training to understand and master it in detail.

* Computer accounting systems. There are various programs on the market. They are fast and allow you to make calculations and also generate daily financial statements on a daily basis. However, you must be cautious when choosing them and avoid falling into the temptation of buying material that is too expensive or too elaborate in relation to the real needs of the company. Most small businesses will eventually need to maintain an electronic accounting system for managing increasing inventories and / or a greater number of operations.

* Simple entry accounting (inputs and outputs). In this system, operations are recorded only once, either as income or expense, as assets or liabilities. All records are made in a journal. It is simple and easy to understand (it is, in fact, the system that is described in the example in this article).

To know more:

When starting your business

In the creation of a new company it is necessary to follow the following stages:

1. Incorporate the company before a notary public and register it with the Ministry of Finance and Public Credit. Remember that when you set up as a company, the single entry method will no longer be useful for you and you will have to use the double entry method.

2. In order to avoid confusion between personal assets and what belongs to the company, it is key to open an independent bank account for the operations of your company.

3. Choose the accounting record system to use. In the simple starting system you will need a spreadsheet with the number of columns necessary depending on the number of expense accounts. In our example we will talk about 12 column sheets. Likewise, you must send to make your invoices numbered and with the name of your company, as well as the checks, orders and all the stationery that you use.

4. Seek tax advice, so that you know what expenses are tax deductible and what their requirements are. The ideal is to contact a public accountant who will prevent you from making mistakes and will advise you on what you need.

It is key to open an independent bank account for the operations of your company. / Image: Depositphotos.com

How to make an accounting record with the simple entry system?

This is an exclusive method for individuals with business activity and legal entities that are registered with the Ministry of Finance and Public Credit under the simplified regime.

Use a notebook or spreadsheet to record the trades for the month and the monthly totals for each column. Use at least one page for each month of the year, the size of which will depend on the number of monthly transactions and will report the totals.

In the first three columns, record the date, the details of the transaction, and the check number. Try to pay all bills with a check and be sure to record all the details on the stub (purchase, date and invoice number). Also record the number and date of the check on the paid invoice. Get in the habit of making it easier for you when you have to record operations.

To know more:

Reserve the next two columns for income and expenses. Each operation must be registered in one of the columns. Income represents the amounts associated with the company’s sales, while expenses equal the payments made by the company.

The other columns are used to record the categories of income and expenses that vary from company to company. In general, you will require a sufficient number of columns to incorporate the expense items for which you most frequently write checks. If you only write one check per year for a specific expense, you don’t need to open a column for that item, you can record it in a column for “miscellaneous expenses.” In our example, the revenue is recorded in the “sales” column.

Example:

The journal entries in the example represent the income and expenses for the month of March for the company “Everything to Dive.” Since this is the second sheet of the month, start with the subtotals reported on the first sheet. The fictitious operations are the following:

1. Check No. 56 for $ 121, dated March 26, payable to Stationery X for the purchase of envelopes and paper.

2. Check No. 57 for $ 1,536 dated March 27 payable to “Diving Accessories” for the purchase of 10 diving suits for resale.

3. Check No. 58 for $ 230 dated March 27 made out to the cell phone service provider for payment of cell phone service.

4. Check No. 59 for $ 580 from March 28 to the insurance company.

5. Bank deposit of $ 5,796.94 from March 28 corresponding to invoices No. 36,37 and 38 and cash sales from March 26 to 28.

6.- Check No. 60 for $ 545 dated March 29 payable to Mauricio Sánchez to reimburse invoice No. 37 for a defective diving suit.

7. Check No. 61 for $ 26.10 dated March 26 payable to the owner of “Todo para Dive” for reimbursement of the March petty cash. (Those expenses such as parking, tickets, etc.), for which it is not necessary to write a check, must be paid by the owner who will keep the vouchers until the end of the month or until the required amount justifies the reimbursement).

8. When receiving the monthly bank statement, it is necessary to compare the checks and deposits indicated in the registry, as well as the charges made for invoice and petty cash payments. There is a difference of $ 15.80 that represents the bank charges for the month.

Once the total is established at the end of the month for each of the columns, the total Expenses must be equal to the sum of all the expense columns. The total of the Income column must be equal to the sum of all the income columns for the month. This allows you to check the accounts and make a balance and ensure, at the same time, that the amounts and entries are the same. Receipts, paid invoices and other receipts should be kept, so that they can be easily found in case of need. For example, a good idea would be to staple all the receipts for a month, put them in an envelope and sort them in chronological order.

How to extend single entry accounting?

Simple entry accounting offers great flexibility, as you can keep a separate journal or sheet for expenses, income, sales, accounts receivable, and accounts payable.

Financial Statements

With the totals that this system returns at the end of the month, you or your accountant should be able to obtain financial statements such as a “Profit and Loss Statement” or “Income Statement”.

For a good control of the company, the accounting record of operations must be carried out on a daily basis. Therefore, it is advisable to reserve a certain time for this purpose. This task can be carried out directly by you as the owner, hiring someone part-time or a third party, but it is convenient that the same person always takes care of this work. In fact, it’s best to start operations once you’ve established who will do the accounting.

It will always be an advantage to hire the services of an accountant from the beginning of business activities. He will be able to answer your questions on the subject of accounting records. If you do not know the processes, it is highly recommended that you take a course that provides you with a basis on the subject.

6 ideas to overcome the fear of entrepreneurship

Depositphotos.com

By Gustavo Giorgi

“Have you acted in accordance with the desire that inhabits you?” Jacques Lacan, Sem VII “The ethics of Psychoanalysis”

I am sure there are many more good ideas than there are ventures, and one of the main reasons for this is people’s fear of starting them.

This article is aimed at all those who at some point imagined having their own business, resigning their job in pursuit of an enterprise or carrying out a personal project such as having a family and could not carry it out due to their own mental difficulties.

The 6 ideas to lose the fear of undertaking

1. The change depends on our choice

The neurotic often thinks in terms of imaginary losses and therefore seems to always want to win. It focuses more on what you could lose rather than the possible gains. First of all, we have to know that whenever we make a decision we will be leaving something aside. Lossless choice is only possible in fiction or dreams, but not in reality. Therefore, I think that the first step is to assume that being better is the consequence of our decision.

2. Survey the resources you have

A good way to understand what this is about is by categorizing them into vital, psychological, economic and social.

It is necessary to determine the state of our physical health, since the brain thinks much better when its carrier is healthy. The Latin principle of Mens Sana in Corpore Sano is still perfectly valid.

To learn more: 6 key actions for you to develop your growth mindset

Then, know what our mood is at that moment, being attentive to its extremes. The ideal would be to be balanced since if we are sad we could assume that only the success in the project would get us out of there, and this magnification of its power would become even more overwhelming. Also, note that, if we feel exultant and euphoric, we can neglect critical aspects of the project.

Regarding the economic resources, they are easily understandable, not deserving a special detention in them, something that the social ones do. Many times we do not value or justly appreciate the enormous capacity of ties in our emotional well-being. Having a solid network of friends or family will allow us to have support when we need it, it will be able to provide us with other points of view and, why not, alternatives to our ideas.

3. Set expectations correctly

Both ours and the other party, are possible users, consumers of our product or service and even a potential partner.

An expectation is a hope that combines both rational and emotional aspects. And I think it is important to work on both, in equal parts.

Let us take the time necessary to clarify and agree on both commercial and emotional relationships. Regarding the first, it is essential that we empathize with the client so much as to know their expectations in depth, and then, articulate them with what we are able to offer. Let us not promise what we cannot deliver.

And about affective relationships, something similar happens. The suggestion is to talk about important issues right from the start. Child ownership and rearing, money management, long-term projects, and so on.

It is about adjusting as much as possible what each one expects from the other party, being as transparent and honest as possible in communication.

It is about adjusting to the maximum what each one expects from the other party / Image: Depositphotos.com

4. Don’t idealize!

Idealization consists of endowing an object, person or circumstance with extraordinary powers and capacities.

Action typical of the first stages of thought but which is not abandoned later in adulthood.

Idealizing an enterprise is expressed in phrases such as: “With this we save ourselves for life” , “It will be the future of my children” or “I need this to walk to be happy .”

Let’s not anchor all or most of our condition of existence to the success of a project. Let us know that the perfect idea does not exist and that even the most successful ventures also have flaws.

5. It won’t work out the first time

It is crucial that we value that the first victory is in the attempt itself, beyond the result.

Reward and acknowledge your action. That you cheered up on the first try. Then, it will come time to calmly analyze what happened so that you can adjust and refine everything you need. Now celebrate …

• To learn more: The MaDeCa Template for entrepreneurs who want to succeed after COVID-19

6. Don’t delay any longer

I read the term “procrastination” for the first time when Lacan was talking about Hamlet. Today is in fashion …

To procrastinate is to postpone indefinitely. For another day, next year or simply, later and in that it takes place from simple things like changing a light bulb to deep questions like investing in a business.

Once again, procrastinating avoids knowing about our desire and in this postponement there is discomfort and the experience of not being able to avoid it. There is a compulsion not to do.

Acting in accordance with our own desire will take work, determination and courage. It will not be a path of roses or thorns. It will be our path and it will have the soil that we can put on it at that time.

Let’s go. It’s over there. Let’s go. Worth it!

Today’s Entrepreneur Quote

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