Always Have a financial record in whatever business you own

[xSkylarx]

I haven't noticed a merchant or business that has no records, or I've just expected that they have them because I don't have really good friends that have businesses, but I've noticed that in some places, like small stores, they always have a POS system for recording the purchases or doing inventory checks and calculating the total earned on that day. Though some probably would just record it in their mind, for sure they are writing it somewhere in their home (but I am not sure). Before we have an online store (for infant wear), it is really impossible to not list down those expenses or profit because you won't see if the business is working well. What I don't understand is why people who got into business don't care about checking their financial status. That is why I am shocked, because by the end of the day, we should be excited about how much we earn.

[Yaunfitda]

I think it boils down to data, and we all know that data is king so even if you are not into business you have to write down anything. Myself do this specially for budgeting and specially what I need to settle every month specially credit card bills, so what's more with your business? You need that data to see where you are missing something or what areas you need more budget as I have a store before so at the end of the day I have to write down everything. So I agree with the OP here, write as much as you can so that you can measure your success or failure.

[Husires]

The problem is that creating these records requires you to work against your nature that you want to spend money and hope that you will have great profits in the future.

Even in your own home, you rarely find a person who records all expenditures and payments and then calculates at the end of the month whether he has achieved profits or losses, and the creation of such lists means that you must be financially disciplined in all aspects of your life, otherwise it will increase the psychological damage to you.

[Doan9269]

The more reasons why many industries and organizations have developed an inventory system in keeping records to their organization activities both in the past and present in other to track any particular occurrence that is of purpose and for future identification on particular event or aspect marked, having a financial records help to have a cohesive budget plan for the business and the financial track  records helps in giving direction to estimate the requirements needed for any future plan ahead a business or an organization to work with.

[robattfield]

This is an obvious problem, in the process of working and collaborating with many people I realize that most of the medium and large enterprises do these things well, but looking at the small scale or the household Families show that people pay little attention to this, which is why they lose control of their finances.
Keeping financial records is always necessary for many things, but I also know many businesses take advantage of this to falsify data and make false statements to raise capital for personal gain.

[ethereumhunter]

If you own a business, you must have financial reports to find out how your business journey is progressing so you can decide to develop your business so that it is even more advanced. But most people don't make those financial statements because they find starting difficult. And most business owners don't learn how to make financial reports even though it's just a report that only they know about the development of their business.

By having financial reports, you can track the use of money in a month and can check whether the use of money is by the plans you made. In the financial report, you can also see how profitable your business is and what needs improvement.

[vv181]

I have always wanted to organize something like a free seminar and educate the owners of small businesses in my community about this but I'm a very introverted and shy person so I don't know how to go about it, please I will appreciate ideas. 

Being introverted and shy is just an excuse. It came back to you to self-reflect on whether you actually want to help/educate your communities or not. You explain clearly and thoroughly the problem that you found within your community. It's up to you to capitalize it. Note that you have something to say that could give benefit others yet it also challenges you to be better personally. It looks like a win-win solution for me.

[darewaller]

The problem is that creating these records requires you to work against your nature that you want to spend money and hope that you will have great profits in the future.

Even in your own home, you rarely find a person who records all expenditures and payments and then calculates at the end of the month whether he has achieved profits or losses, and the creation of such lists means that you must be financially disciplined in all aspects of your life, otherwise it will increase the psychological damage to you.

I don't see that as a problem but it's a good thing rather because this will help you improve. Spending money in a business is normal and this money can still be regained later on, when our business becomes profitable. Recording expenses isn't only found on a business owner but it's also important to do in our house hold so that we can be able to control our spendings and still have some money for savings.

Having such lists doesn't mean that the person is now well disciplined in other aspects of his life. No person is perfect but each of us has their own imperfections. That's okay though at least you have some great qualities with you as a person.

[Fortify]

I had this barber friend in a neighboring hood I lived a few years ago who is a very good barber and has his own barbershop. He does home service from time to time too. He’s really good so he has a lot of customers but at the end of the month he always struggles to pay the rent of his shop. I spent most of my free time with him at his shop so I know the number of customers that walk in for a haircut daily and I know what his rates are, so by calculations, he should be making enough money even after rent and other expenses required to run the shop. So one day when he complains about rent I asked him how much he makes in a week and he couldn't tell me an estimated number.
Long story short, I educated him on how to keep financial records and record every single penny that comes in and goes out of his business. I also made him understand how this can help him cut losses and make more profit.

The point of this whole story is that I have encountered a lot of people who have small businesses and don't even bother about keeping records in their businesses and this single reason could be a hindrance to growing your business.
No matter the kind of business you do, you should be able to know if you are making a profit or running at a loss. After analyzing a distant relative business I found out that she was taking money from another business to sustain another business. In the long run, both businesses will go under. Not only does a good financial record help minimize losses but it also helps lessen the burden of your taxes.

You don't have to be a big corporation before you keep a record of your daily financial transactions. And no, it doesn't have to be a perfect or standard financial record or statement. It could be done in any way you and the next person will understand. It should just include all the money coming into your business and all the money going out of the business in whatever form. At the end of the day, you should be able to know how much you made in total, how much you have at hand at the moment, how much went to your bank account, how much is in the hands of debtors, how much you owe for bills and to your customers or any other person or entity.

An accurate financial record helps you;
Know the progress of your business: It's through the financial record that you know if your little business is safe or about to go under. If your business is safe your records will also let you know how safe you are. When your records have enlightened you on the future of your business then you can now make a decision based on what the financial records show.
Identify income sources and reduce unnecessary expenses: When you look at your financial records at the end of the month and you see the business not heading in the desired direction, then you do something about it, You can either start cutting down expenses that are not necessary or identify the part of your business that generate the most income and put more focus on it.
Allows you to attain complete regulatory compliance: I stated earlier that an accurate financial record helps with your taxes. Of course, you have to pay taxes, but you can't do that accurately if you don't keep an accurate financial record and that might put you and your business in trouble with the regulatory bodies in the future. Not only does our financial record help figure out your taxes but it also supports the items written on your tax returns.

There are many more benefits of keeping financial records and I know it's not the most exciting part of your business but it is essential to your business. It doesn't matter how small your business is, be it, laundry, hair salon, boutique, online store, etc, always keep financial records.

I have always wanted to organize something like a free seminar and educate the owners of small businesses in my community about this but I'm a very introverted and shy person so I don't know how to go about it, please I will appreciate ideas. 

Some of this sounds fairly obvious, the main one being keeping track of your finances - you must be on top of your incomings and outgoings if you want to identify whether your business is successful. It's key to also look at all the secondary expenses that you may overlook, like driving to and from the work premises can add up to a lot of money over time, so you better be paying yourself a salary that can cover that too. Not to mention, most people will have to submit financial records in the form of tax returns, both personal and for a business they run, so it's better to keep a running tally instead of letting it pile up into a huge job performed once a year.

[carlfebz2]

Having a record would really give out idea whether you had progressed or not.Its a must thing as a businessowner because we've put our money into this investment which it would really be just right that you should

really be having that good track of it.You cant just be that careless or doesnt mind on what are your expenses and other factors which would really be in related to business.If you do set out proper plans
and proper handling with your business then dont expect for something positive. You would really be living on having that continuous losses and might ending up on a demise of your business.

[justdimin]

There are a lot of things to be said. I even wanted to add an image or two to show people how they could easily record their financial records on a spreadsheet or a notebook. It really is very broad.

These type of things looks so obvious, how come they are not found out earlier? I mean I am not saying that this is a lie, it could be truth for sure, because there are morons in the world, but we are talking about 8 year old kids mathematical question levels of simple thing here.

You make a burger, and you sell a burger, and you know what the burger has in it, so you know the cost, so you sell it for higher than what it costs, how hard that could be? Or you buy a beer, and you sell that beer, if the beer is 8 bucks and you sell it for 6 bucks then you lose money, how hard is that? Seriously, how hard is that? That's something 8 year olds can figure out, it's not rocket science.

[DrBeer]

Very briefly: doing business and not keeping records of income and expenses is the path to bankruptcy. What else will accelerate bankruptcy is the lack of planning costs, and comparing them with income. Also, not understanding the basics of doing business is not playing into the hands. For example, such a concept as "a cash gap" - when you seem to have, according to your plans, conditionally for a month, you should have enough money for everything, but you don’t have enough! The problem is that without scheduling, you may end up with a situation where on the 30th you have a total income of $10,000, but you have to pay rent on the 15th, and on the 15th you only have 2,000... There are many more classic management practices business and cash flow management. Without it, your friend will suffer for the rest of his life.

[michellee]

You have done a good thing by helping your friend to have financial records so that your friend knows how much profit he gets in a day or a month. And indeed, every business should have financial records so that business owners know the progress of their business from time to time.

You can start helping other friends who have their businesses so that later, several other friends will follow or ask for your help in making the report. And after it's running, you can make free seminars for other friends so that your friends' businesses can grow even more. Start with small steps in helping your friends and when it starts to become big, you will be able to overcome feelings of shyness or isolation because you can feel joy in helping your friends.

[DainSLane]

In my opinion Keeping accurate financial records is crucial for any small business to succeed. It help with understanding the progress of the business identifying income sources reducing unnecessary expenses, and achieving regulatory compliance. The leverage social media platforms for promotion with a local university or college to host the event

[Lorence.xD]

Having a record would really give out idea whether you had progressed or not.Its a must thing as a businessowner because we've put our money into this investment which it would really be just right that you should really be having that good track of it.You cant just be that careless or doesnt mind on what are your expenses and other factors which would really be in related to business. If you do set out proper plans  and proper handling with your business then dont expect for something positive. You would really be living on having that continuous losses and might ending up on a demise of your business.

This is true, you could see your improvement by just simply storing your business records. Companies could also use them in the future for emergency purposes like let's say for example they got blamed and had to attend courts. You can show them your past records in the trial as a proof of your legitimately of your company. Records about transaction could be also useful incase you needed them. For my experience, I have a small convenience store before and I always have record of payments, bills and business permits. Few people from there always questioning about why suddenly I opened a business and they want to close it down. If only they knew that before I opened up my business I already fixed the papers for the business so I printed it out pasted it outside my store. Also I have a customer who tried to scam me with digital payment where they have to sign the log first before payment which it records the previous transactions. Then like weeks later she came back saying that she'd still haven't got the money where I showed to her to records she'd signed up and she silently leaves.

[so98nn]

You don't have to be a big corporation before you keep a record of your daily financial transactions.

This caught my eye more than anything else. There should be lessons about maintaining accounting books for ab individual as well and it should be taught way way early. I am pretty much sure this can change many things in a persons life. I believe this practice is already there in the developed countries like US and Europe? Not sure but looking at the movies and series they do teach kids on how to manage the expenses and everything. This can only benefit them to survive alone without any support.

Those who think they are doing just fine with the expense management could be very wrong. I have tried to do such savings over long period of time but it doesn’t work that way. Somehow you end up doing lot of expenses which are unwanted. There needs strict policies and you should be loyal with them to have long term savings. It helps.

[alastantiger]

Records are crucial documents that must be maintained. Maintaining financial records is very crucial for any organization or business since it allows you to understand if your operations are profitable or not. I own a little shop where I sell things. At first, I didn't keep records since I told myself there was no need to keep records since the business was solely mine. I thought i wouldnt be needing any records for my business. But by keeping track of my finances, I can determine at the end of each week whether or not my firm is expanding or not.
It helped me cut down my unneccessary spending.
In every business, financial records are very important.

[Anonylz]

I also have a close friend who engage in petty trade, the only record she keeps that i know of is the debt record, because she have different people buying some of her items on credit so she only bother about keeping records of her debtors. I guess by doing this she can already be able to know her cost, expenses and profit.
Keeping records is very important but some business owners may sees it as time consuming and may not be interested in doing so even if it will be very helpful for the growth of their business. This can also apply to none business owner, anyone can keep record of their daily expenses which can help them to plan properly.

[bittraffic]

As much as I want to also see where my spending goes in a household, one can only assume it goes to food and utility bills. These are all important to living in a house. In order for me to make this record, it will add another time loss for resting. 

For a businessman who owns works as a barber and manages a barbershop, he will need one more skill such as simple spreadsheet bookkeeping. A tiresome job but as important as learning to see things before the business fails.

[ololajulo]

I think financial records are really needed for entrepreneurs, even non-entrepreneurs are really needed. Because we can easily analyze if there are obstacles or problems in the business world that we live in, so we can easily track down the mistakes we make or control unnecessary expenses.
That way we are more efficient in unnecessary expenses in the future.

Analyzing financial records allows businesses to analyze past performance and project future growth, making informed decisions about investments, expansions, and other strategic initiatives. By tracking income and expenses over time, individuals and businesses can create and stick to budgets.