RECORD YOURSELF TO MANAGE YOURSELF

In Sri Lanka, it is very rear to find micro, small and medium scale business keeping proper financial records of the business. Yet, it is extremely important to keep financial records of your business regardless of the size. There are many accepted methods of recording financials but to start report your small business the method of recording is not a matter.

The following are the important reasons of recording yourself

ü  To determine the profitability of the business.

ü  To get an idea of the business volume.

ü  To expand the business.

ü  To diversify the products.

ü  To compete with other competitors.

ü  To ensure the quality of the output.

ü  To attract investors.

ü  To get financial assistant of banks.

ü  To be confidence about yourself.

ü  To face the tax regulations without any doubt.

When we talk to the business owner most of the people draw following reasons for not recording their financials properly.

´        Lack of knowledge.

´        Poor literacy.

´        To hide the actual profits.

´        No proper idea about the market.

´        No any idea about the new trends.

´        Fear of regulations.

´        Do not have any future plans.

´        Do not have a dream goal.

 But if you dream your future, your dream will bring you to the destination. History has many examples interestingly there multiple of examples available in Sri Lanka. So do not make boundaries yourself for your success. Positive thinking is another dimension as dreaming. So make them best friends of yours to go beyond the challenges.

 Now let us consider a small example.

Rayan is a having a small business of preparing lunch packets and distribute to several canteens of offices around his home place. At the beginning he had Rs. 250,000.00 with him. In order to start the business he happened to buy pots and pans worth Rs. 200,000.00 and raw materials of Rs 50,000.00 to prepare the rice and curry. His wife is cooking well and she is preparing foods. He started on 10/05/2015.

So Rs. 250,000.00 is his capital invested for the business. The pots and pans become assets. They prepare 3 types of lunch packs. The firms pay cash each day and he purchases rice and other goods once a week. So he can keep his records as given below for the reference,

Date	Description		Cash in	Cash out
10/5/2015	Rice, Vegetables and other goods			50,000.00
11/5/2015	Sales Lunch packs
	Type I	50 X 150	7,500.00
	Type II (50X 150)	60 X 200	12,000.00
	Type III	45 X 250	11,250.00
	Transport			1,000.00

If Rayan records his all transaction continuously he can review or make relevant statements to evaluate his business.

Important facts to remember when you start a business….

ü  Register your business in relevant authority because prevention is better…

ü  Open a bank account (Current account is better) in business name and rotate your cash flow.

ü  Record your transactions properly.

ü  Respect to rules and regulations.

ü  Respect to your customers.

ü  Save for future.

I think now you may have understood the importance of record your transaction properly to manage your business to improve profitability because without profits there is no future for your business.

                                                                                    Gayan M. Perera                                                                                                                                                             B. Sc. (Hons) Sp. Maths (USJP)

                                                                                                                M. Sc. Financial Mathematics (UOC)