Rule One of business: keep a close eye on your cash.
As a business owner, it’s essential you keep track of your transactions for reasons ranging from filing taxes accurately to predicting future sales. Whether you’re selling products or services, a sales ledger will help with your bookkeeping. But how do you set one up?
Here’s how to create a sales ledger for your business the right way.
Define Your Trackables
The first step is to decide what information you need to track. Do you need to track customer information, such as contact information and purchase history? Do you need to track product information, such as SKUs or pricing? Or do you need to track both?
The reason this is the first step is that it might influence your choice of format for your ledger — you might need more advanced features than a basic ledger program can provide, for instance.
Choose Your Ledger Format
Now you’ll need to choose a format for your sales ledger. You can use a spreadsheet program like Microsoft Excel or Google Sheets, or you can use accounting software like QuickBooks or FreshBooks.
Spreadsheets might be appropriate for a small start-up business, but they can quickly become cumbersome as your business grows.
Accounting software is designed to manage sales and customers, so it might be a better option for a larger business or for future-proofing a smaller one. It might also be the better choice if your finances involve any complexities, such as invoice discounting.
Set Up Your Ledger
Now it’s time to start building your purchase ledger’s database of customers and transactions. If you’re using accounting software, you may be able to import data from your business transactions automatically.
Otherwise, you might have to set this up manually. For that, you’ll want to refer back to the must-haves you determined in step one.
Grant Access
Of course, you’ll often need to share your sales ledger with others in your organization. If you’re using accounting software, you can give others access to your sales ledger so they can view or edit it. This can be helpful if you have multiple people working on sales, or if you want to give your accountant or bookkeeper access to your sales data.
For a low-tech spreadsheet, you might need to share it on a cloud platform like Google Drive.
Establish Auditing Responsibility
The owner, or someone the owner designates, should be responsible for auditing the sales ledger. This responsibility includes reconciling the sales ledger to the company’s bank statements and other financial records. The auditor should also review the sales ledger for errors and discrepancies.
If the company uses accounting software, the auditor may be able to set up automatic reconciliation between the sales ledger and the company’s financial records. This can help to ensure that the sales ledger is accurate and up-to-date.
Building Your Sales Ledger the Right Way
A sales ledger is an essential tool for tracking sales data, but setting one up can feel like a daunting task. Yet with this simple guide, you’ll be able to set up a sales ledger for your business in no time.
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