Help with Accounts

[mir]

Hi,

I need help with maintaining accounts for a small business. I want to know how to make proper accounts for auditing purpose

The business is started by a enterprenuer and his expenses are all either through personal account cheque or cash. Now he has opened a company account and PDC are going out from his personal account as well as company account.

Need to ensure every single entry is recorded .

Please help

 

[gazmentsaci]

Do you use any accounting software to maintain your accounts?

 

[Samir]

The way I usually track this type of thing is to make sure there is a company set of books and treat anything that is spent from his personal account as an equity investment and then expense (or however it would be accounted) it through the company.

The expenses coming out of the company account are pretty simple--account as usual.

This way, you see what he has invested via his personal account and the expenses are all recorded on the company books.

 

[Counterofbeans]

If he insists on using his personal account for company transactions, I'd have him (or complete myself) an expense reimbursement form and cut him a check for company expenses incurred by him through his personal account.

Ultimately, I'd have every cash transaction running through the company account.

I would then push to have him not use his personal account for company transactions

 

[Samir]

If he insists on using his personal account for company transactions, I'd have him (or complete myself) an expense reimbursement form and cut him a check for company expenses incurred by him through his personal account.

Ultimately, I'd have every cash transaction running through the company account.

I would then push to have him not use his personal account for company transactions

While this method is what most large companies use, I find that just entering in the actual receipts and counting it towards equity is the easiest thing. Most of the time people co-mingling finances like this get confused by a check coming to them for expense reimbursement.

 

[Counterofbeans]

While this method is what most large companies use, I find that just entering in the actual receipts and counting it towards equity is the easiest thing. Most of the time people co-mingling finances like this get confused by a check coming to them for expense reimbursement.

How do you get the information to enter it as cash receipts? Get his personal bank statement information?

If he's purchasing goods/services through his own bank account, I don't understand how you'd ever know it without getting that information and that's often considered personal/private.

 

[Samir]

How do you get the information to enter it as cash receipts? Get his personal bank statement information?

If he's purchasing goods/services through his own bank account, I don't understand how you'd ever know it without getting that information and that's often considered personal/private.

Yes, you physically get the cash receipt for a paper trail. The other transactions you can pull off the bank statement, but I typically also just get the receipts since I don't care how they paid for it, just that they did pay for it.

 

[mir]

Thank you all for your replies. We are using a software and I need to set up Chart of Accounts

Please help me with how to enter chart of accounts and cost centers