DIY DAILY BOOKEEPING

To run a business effectively and efficiently, you need information about profit, cashflow and working capital. To be able to prepare your profit statement, you need information about your sales, purchases, and inventory for instance. That is to say that you need to maintain the proper books of account if you want to be able to track your business performance. I recommend maintaining the daily sales register, daily purchase register, cashbook and inventory register. The above mentioned books are important for a business still maintaining manual books of account. the books can be also a backup for businesses using computer based accounting. The books should be maintained by the bookkeeper for review and processing by the accountant.

1. DAILY SALES REGISTER

Daily sales register is a journal where all the daily sales are summarized whether they are paid or not. It is a slight modification from the normal sales daybook where only credit sales are recorded. The aim of this book is show balancing and ensure that the sales of the day equals cash collected and credit owed by customers. It is important for the sake of tracking totals sales and ensuring that the day’s sales are balanced.

COLUMNS OF A DAILY SALES REGISGER

  1. Date: records the date of the transaction.
  2. Party: records the name of the customer.
  3. Invoice Number: records the number on the sales invoice.
  4. Amount: records the total amount on the invoice.
  5. Cash: records the amount of cash received from the customer.
  6. Bank: records the amount of money the customer paid to the bank
  7. Credit: records the of money the customer
DateCustomerInvoiceAmount (CR) Cash (DR)Bank (DR)Credit(Dr)
1/2/2022Customer 1001100,000 50,00050,000 
1/2/22Customer 200250,000   50,000
1/2/22Customer 300380,000 40,000 40,000
1/2/2022Custome 400490,000  40,00050,000
1/2/2022Customer 500530,000  30,000 
1/2/2022TOTAL 350,000 90,000120,000140,000
SAMPLE DAILY SALES REGISTER

The table above is an illustration of sales transactions of a business on the 1/2/2022. The first customer bought goods for N10,000 and paid N50,000 cash while and deposited the balance of N50,000 to the company bank account. In the second transaction, the customer bought goods for N50,000 on credit. Thirdly, customer 3 bought goods for N80,000. The customer paid N40,000 cash and he owes the balance of N40,000. In the fourth situation, customer 4 bought goods for N90,000, paid N40,000 to customer account and owes N50,000. Lastly, customer 5 bought goods for N30,000 and paid to the company’s bank account.

In conclusion, you can see that the total sales of N350,000 equal the total of cash N90,000 and bank N120,000 and credit N140,000 (N350,000). This means you have properly accounted for your sales.

2. DAILY PURCHASE REGISTER

Daily purchase register on the other hand is used to track goods bought on a particular day and the mode of payment for such goods. That is to say, it shows the purchase amount and indicates if the purchase was paid or on credit. furthermore it also shows the mode of payment, whether cash was paid for the goods the payment was made through the bank account for example. The columns on a daily sales ledger are similar to those on a daily purchase register.

COLUMNS OF A DAILY PURCHASE LEDGER

  1. Date: Records the date of the transaction.
  2. Party: Records the name of the customer.
  3. Invoice Number: Records the number on the sales invoice.
  4. Amount: Records the total amount on the invoice.
  5. Cash: Records the amount of cash received from the customer.
  6. Bank: Records the amount of money the customer paid to the bank
  7. Credit: Records the of money the customer
DateCustomerInvoiceAmount (DR)NGN Cash (CR)  NGNBank (CR) NGNCredit(Cr) NGN
1/2/2022Supplier 1001100,000 50,00050,000 
1/2/22Supplier 200250,000   50,000
1/2/22Supplier 300380,000 40,000 40,000
1/2/2022Supplier 400490,000  40,00050,000
1/2/2022Supplier 500530,000  30,000 
1/2/2022TOTAL 350,000 90,000120,000140,000
SAMPLE DAILY PURCHASE REGISTER

The table above is an illustration of the purchases of a business on the 1/2/2022. Firstly, the Supplier sold goods to the business for NGN100, 000. meanwhile, the business paid NGN 50,000 cash and paid the balance of NGN 50,000 to the supplier bank account. secondly, the business bought goods for NGN 50,000 on credit. Thirdly, Supplier 3 supplied goods for NGN80, 000.The Business paid 40,000 cash and owes the supplier 40,000. In the fourth situation, supplier 4 supplied goods for 90,000, the business paid NGN40,000 to the supplier account and owes NGN50,000. Lastly, supplier 5 supplied goods for NGN30, 000 and paid to the company’s bank account.

3. CASH BOOK

The cashbook is used to record daily cash collection. It is advisable to maintain a two column cashbook containing a cash column and bank column where the company has a bank account. Maintaining this kind of cashbook will help you keep track of both cash at hand and bank balances. A cash book is both a journal and a ledger.

COLUMNS OF A CASHBOOK

Date: Records the date of the transaction

Description: Records the nature of the transaction.

Reference: Indicates the source of the information

Cash: Records the amount of cash involved in the transaction.

Bank: Records the amount withdrawn or deposited to the company bank account

Cash balance: Shows the amount of cash at hand

Bank balance: Shows the amount of money in the bank

DateDescriptionRefCash (NGN)Cash balance (NGN)Bank (NGN)Bank Balance(NGN)
1/2/2022Opening balBal b/f50,000150,000
1/2/2022 salesDSR90,000140000120,000270,000
1/2/2022purchasesDPR(90,000)50,000(120,000)150,000
1/2/2022transportationGL(20,000)30,000150,000
1/2/2022Bal c/d30,000150,000
SAMPLE CASH BOOK

The table above is an illustration of a sample cashbook. That is to say the opening balance is the closing balance of the previous financial period. meanwhile, the total cash sales (NGN90,000) of the day are added to the cash column while the total paid to the bank (NGN120,000) is also added to the bank column. Similarly, the cash (NGN90,000) payment for purchases is deducted as well as payments made through the bank (NGN120,000). Furthermore the business also paid transportation expenses of NGN20,000 in cash. This means that the business closed with NGN30,000 cash and NGN150,000 in the bank.

3. INVENTORY CONTROL REGISTER

The inventory control register records the details of all items of goods goods bought and sold by an organization within a period of time. Recording in this register begins with opening stock for existing businesses. contrary, new businesses wont have existing inventory. when goods are bought, they are added to the the existing balance in this register. on the other hand, when goods are sold, they are deducted from the existing balance in this register. Finally, balance of each item that is remaining must equal the physical inventory.

Columns on an inventory register

a. Date: Records the date of the transaction

b. Description: Records the details of the transaction or the customer name.

c. Invoice number: Records the sales or purchase invoice numbers respectively.

d. Items: Used to record the the quantities of every item bought or sold.

DateDescriptionInv. No.Item 1 (SKU1) (SMOOV)Item 2  (SKU2) (Fearless)Item 3 (SKU2) (Coke 60CL)Item 4 (SKU3) (Yugo)
1/2/2022Opening bal000110040050 
1/2/2022Supplier 1Sp100345007001000700
1/2/2022Customer 10001(50) (40)(10)
1/2/2022Customer 20002 (300)(500) 
1/2/2022Customer 30003(100)(200)(150)(150)
1/2/2022Bal C/D 450600360540
SAMPLE INVENTORY REGISTER

From the illustration above, the business sales four items, smoove, fearless, coke and yugo. the business opened with 100 units of smoove, 400 units of fearless, 50 units of coke 60cl and no yugo. The same day, the company bought 500,700,1000 and 700 units of smoove, fearless, coke and yugo respectively. In sales, the customer sales are recorded accordingly how each of the items is sold. to balance smoove, add opening to purchase the less sales (100 + 500 – 50 – 100 = 450). Note that all sales are in bracket to show it is minus. Also apply the same rule for the other items as well.

conclusion

Managing a business is very tasking. Because you need to keep your eyes on your finances to see if the business is doing well. To get the information you need, you must maintain books of account and also balance them daily. It is therefore important to maintain a daily sales register, daily purchase register, cashbook and the inventory control register. Still confused on how to go about it, contact Accountbase to help setup your books.

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