The biggest failure for a business just starting is neglecting to account. You need to understand how to properly maintain sales accounting so that the business finances don’t fall apart. You also need to get used to bookkeeping since the business is still small so that the sales process runs regularly later on.
It is not difficult to create ledgers to record the incoming sales in your business. We explain the steps to create a sales ledger that can be applied to small businesses. Just check out this article to find out how.
What Is Accounting?
Accounting is the activity of collecting data and financial information in the form of assets, liabilities, capital, costs, and prices. All this data is then prepared and presented in financial statements, namely income statements and profit and loss statements.
The accounting process aims to minimize errors in changing transactions so that companies avoid more complicated problems.
The Importance of Sales Accounting for Small Businesses
Sales accounting plays an important role for businesses of all sizes, including small businesses. You can minimize the risk of losing products, assets, and even money. You will learn more about the number of goods sold and the amount of money that went into the cash register. This process is also useful to know the profit and loss statement at the end of the period.
The sales accounting process must be recorded as completely as possible so that you can see a list of the transaction history that occurred in a period. You can detail the number of items that come out in a period so that you can provide sufficient product inventory, i.e., no less or no more.
Advantages of Accounting for Business Strategy
In the business world, both small, medium, and large businesses recognize the need to have accurate financial records. Your business will grow faster if your financial records are well organized and managed with simple bookkeeping. Here are some of the benefits of business accounting:
- Can quickly and accurately determine revenues, losses, payables, and receivables as a financial accounting tool.
- Can be used as a financial control tool as well as a financial trend monitoring tool.
- Inventory accounting, which can reduce the possibility of losing goods and assets by calculating operating profit and loss.
- Can understand the need to pay taxes.
- As a tool that can be used to reduce operating costs.
- Can help determine how well the company is performing.
- Can be used as an analytical tool to help achieve the goals of business operations.
- Can help provide information for planning, monitoring, and decision making.
- Can be used as a general ledger that can be used as evidence when applying for a loan, investment, or credit from other sources.
- Can be a cash flow and guide in decision making.
4 Sales Accounting Options and Examples
The sales accounting process must be done sequentially. Many records need to be made, such as records of expenses, revenues, and inventory. Check out the complete steps below and also pay attention to the examples so you can understand them better.
1. Record Expenses
Make sure you already have a business account that is separate from your account so that the expense data is not mixed. Then record the expenses in an easy-to-understand tabular format. Also, keep the expense statements as material to confirm the entered entry data.
There are also expenditure transactions that need to be recorded that consist of product raw materials, operating costs, salaries of production employees, etc. This note is useful to know the capital spent to produce a product. See the example below.
| Date | Description | Debit | Credit | ||
| Miscellaneous | Accounts payable | Purchase discounts | Cash | ||
| 03/05/2022 | Production Machinery | 8,000,000 | 8,000,000 | ||
| 10/05/2022 | Raw materials | 7,000,000 | 7,000,000 | ||
| 5/16/2022 | Light store | 3,600,000 | 900,000 | 2,700,000 | |
| 5/29/2022 | Employee salaries | 4,000,000 | 4,000,000 | ||
| Total | 19,000,000 | 3,600,000 | 900,000 | 21,700,000 |
2. Record Income
Next, you need to record the company’s income in a separate general ledger. There are also types of income in the form of the number of product sales, services received, receivables paid, and the like. Income must be recorded every day so that you do not suffer losses.
| Description | Total | Due | Date | Payment | Date | Balance |
| Mr. Rocky | ||||||
| Men’s suits 5 pieces | 05/05/2022 | 2,500,000 | 05/12/2022 | 2,500,000 | 05/05/2022 | 2,500,000 |
| Mother Magdalena | ||||||
| Fabric 10m | 8.5.2022 | 5.000.000 | 15.5.2022 | 1.500.000 | 13.5.2022 | 4.000.000 |
| Bridal shoes 1 psg | 8.5.2022 | 1.000.000 | 15.5.2022 | 1.000.000 | 13.5.2022 | 5.000.000 |
3. Create a Cash Book
This cash book contains a combination of expense and revenue transactions made. The cash book is useful for you to analyze and determine the right financial strategy for your business in the future. Apart from this, you can also find out whether the current financial period is recording a profit or loss.
| Date | Description | Entry | Expenditure | Balance |
| 1/5/2022 | Beginning balance | 40,000,000 | 40,000,000 | |
| 3/5/2022 | Production machinery | 8,000,000 | 32,000,000 | |
| 5/5/2022 | Men’s suit sales 5 pieces | 2,500,000 | 34,500,000 | |
| 05.08.2022 | Sale of fabric 10m | 5.000.000 | 39.500.000 | |
| Sale of bridal shoes 1 PSG | 1,000,000 | 40,500,000 | ||
| 05.10.2022 | Raw materials | 7.000.000 | 33.800.000 | |
| 5/16/2022 | Light store | 2,700,000 | 31,100,000 | |
| 5/29/2022 | Employee salaries | 4,000,000 | 27,100,000 |
4. Record Inventory
You also need to record inventory items to monitor the amount of stock on hand to ensure it remains sufficient to meet customer demand. Capturing inventory is also useful for minimizing vendor and employee fraud and planning inventory for new store openings.
| Date | Transaction | Mutation | Stock amount |
| 31/5/2022 | Stock Adjustment | 5 | |
| Beginning Balance | 40 | 40 | |
| Invoice | -7 | 7 | |
| Sales Returns | 7 | 7 | |
| Number of Items Available | 45 |
You can apply the above example and the creation of a simple sales accounting system to a business that is still small. You can customize the accounting format by adding a check or receipt number for reference. Not only accounting but also marketing strategies need to be improved so that your business can attract more and more customers.
Example of Daily Sales Accounting
If you are running a business, you need to keep a simple daily accounting of sales. The steps are quite simple and are as follows:
1. First Determine The Purpose of The Report
If you know that you will use the sales report for personal assessment, you can customize it as you like. However, it must be in a form familiar to many people if it is to be presented to others (investors or business partners, if applicable).
2. Select The Sales Date Range
The sales accounting will reflect this. Be it every day, week, month, or even year.
3. Collect All Transaction Records
Organize data by time frame. Collect all transaction evidence in one day if the dating pool is daily, and so on.
4. Enter All Data Into The Table
After collecting all the necessary data, enter it into the created spreadsheet. This is important for income and expense recording.
5. Perform Analysis
This objective is done so that you can learn what conclusions can be drawn from your sales accounting. For example, today’s sales exceeded yesterday’s sales or today’s sales exceeded yesterday’s sales.