Thursday, February 29, 2024

Bookkeeping Part IV - Revenue Capture

Capturing every revenue transaction promptly and accuratelyis a critical phase of bookkeeping.

First it is critical to capture the revenue. Second this will allow the business to tie-out cash and receivables accurately.

If you cannot tie-out cash and receivables your internal control system is inadequate.

Whatever system you use, it must be customized to your type of business and your specific circumstances.

Cash** only

Cash and billing on account  (generating receivables)

Billing  accounts only  (generating receivables)

Prepayments / retainers

Single transactions (e.g., car dealers) per customer

Consult your accounting and tax advisors, and possibly your IT advisors, for assistance with customizing and monitoring your revenue accounting.



** "cash" meaning currency, checks, debit and credit cards, portal sales (Pay Pal), wire transfers and any other financial transfer means





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