A business credit journal is the pulse of your business. Keeping track of all those expenses is important. However, there are so many things to do that it's easy to make a mistake or overlook an expense. By jotting down everything on paper, you can check it later for accuracy and later on if needed to eliminate a bill. This can prevent you from spending more money than you have, or at the very least, will allow you to get a quick assessment on how much you might be able to save.
Your journal is your business at its best, keeping track of your spending and income, when keeping track of your business expenses can be quite difficult. Business credit management is an important skill to learn for any business owner. You have to be honest with yourself about what your company can and cannot afford. It's also important that you keep track of your expenses and report them timely, otherwise, you could find yourself in hot water with your credit companies, banks, etc.
One of the best ways to keep up with your business credit journal is to use an online accounting program like QuickBooks. It will give you a comprehensive view of your finances. Some programs are better than others. However, there are a few features that are required in order to use one of these programs as a business credit journal. It should give you:
Tracking of your expenses – Whether it's gas lunches out, or luncheons with clients, keep good records of all business expenses. The more detailed your records are, the easier it will be for you to get your hands around your income and expenses. Also keep good records of when you buy something for your business, whether it's a new computer or printer. When you buy something for personal use, write it down as well. This information will come in handy later when you make purchases for your business.
Expense tracking – You must be able to measure every single expense you incur. This will help you make sure that every dollar spent is actually getting revenue for your business. Some business owners try to underestimate their expenses and underestimate their revenue. This is a mistake. You must keep good records. And if you need to, you should even be able to do double check your expense reports each quarter.
If you are planning on purchasing a new machine, it's a good idea to take some photos of the machines you are considering. These photos can be taken before and after the sales are completed. They can show you how the machines are being used and what they contribute to your revenue. Photos can also show you if the machines will reduce your customer traffic or increase it. This will be vital information to keep in mind if you're planning to revamp your location.
Keeping track of your receipts – Each month, write down the dates of all of your invoices. This will help you build a history of when you received the money from a sale or a credit card payment. Your credit card invoices can sometimes . . . . . . be difficult to document since they don't always clearly show the date of transaction. However, if you can get proof of the date of the transaction, it's much more useful than just the word of mouth account that most merchant accounts give you.
All business credit journals should be kept for ten years. After that time, you should destroy the file, no later than two years from now. If you decide to use it for your own business, destroy it while still valid. You can't bring the file around to show to potential lenders if you don't have proof of your financial history. A business credit journal is invaluable for any business owner, especially those who want to improve their cash flow and track spending.