Business and Farming: The Basic Steps of Organizing Your Accounts

If you want to transform your small weekend affair into one of the highly-earning organic stores Manila, then you must know the basics of handling your finances. You won't know if you're making a profit if you don't understand the formula on how to tally your income and expenses. Moreover, you need to put your money in a safe place. You don't want your hard-earned money mixing with the budget you set for your home. It can result in a disaster.

Whether you're in it for the safety of your finances or hoping to grow your keep, you should know the necessary steps of organizing your accounts. Staying organized minimizes mistakes and ensures you're on the path to hitting your targets. Lastly, it can make things easy once you start expanding your business. You won't have to look for receipts, tax records, and other essential documents.

Below are the things you must know when organizing your accounts.

1. You must have a separate bank account.

Your business account should not be the same as the account you use to save for retirement or other big-ticket purchases. You can start by setting up a business checking account. You can also get a business credit card for your business to build credit. At the same time, having a credit card lessens the incidence of mixing business assets and personal buys.

2. Pick the right bank

Don't open an account or transact with the nearest bank in your area. You should survey which bank offers the least fees. Most business checking accounts apply charges higher than most personal bank accounts. You should pay close attention to these, so you don't end up with expensive rates.

3. Learn the items on your financial statements

Your business financial statement shows your company's performance. At the same time, financial statements can be your guide to assessing past performance and managing expectations. These can also be your means of communicating with interested parties. You can reach out to creditors, investors, and analysts through your financial performance.

Accountants are the only ones who can prepare your financial statements. It's easy to leave everything to their hands to ensure you have the papers you need in your hands. However, you must also know which things are part of your statements. That way, you can check if there are wrong entries or discrepancies in your balances.

4. Establish a way for organizing receipts

You should keep all the receipts from all your business transactions. You never know when you might need it. Thus, you should have a system for storing your receipts. You can keep it in an envelope or a box. You can store them in any place as long as you can bring them out when you need them. Also, they must be separate from your family records and other personal papers.

5. Categorize your expenses

When you're running a small business, you can easily mistake a fee from the other. For instance, your family luncheon can be part of your "meals and entertainment" category even when you didn't discuss business the duration of your meal. To separate your expenses, you must first identify the groups they would fall. Separate meals, travel, transportation, utilities, and business-related purchases. Knowing the divisions helps you easily categorize the costs incurred. It also enables you to determine if the fees should be filed under your business or not.

6. Have a bookkeeping system

Bookkeeping is different from accounting. It is the daily process of recording transactions, putting them in the right category, and reconciling bank statements. Meanwhile, accounting makes sense of these records to create the financial statements. Now that things are clear, it's time you determine the bookkeeping method to use.

You can design a system of your own, or you can hire a part-time bookkeeper to oversee your cash flow. Once you have enough revenue, you can have an in-house bookkeeper and an accountant. You also have to determine if you will use the cash or accrual method of accounting.

7. Establish your payroll system

When you have people helping you out or working under you, you must first establish if they are regular employees or a freelancer. You'll need to have a payroll schedule and ensure your paying taxes correctly. Be sure you know how much you spend on each person and that you are providing the right compensation.

8. Know which payment schemes to offer to your customers

You must find different ways to accept payments. You can set up a merchant account or a third party processor. A merchant account is a type of account that enables you to process credit card payments. The payment gateway you choose depends on you and your customers. If most of your customers prefer to use their e-wallet or swipe their cards, then you should have a merchant account or a third party payment processor.


When setting up your business, you should not only think of your products and the overall setup of your store. You should also take care of your accounts, think of how you accept payment, and how you will record your expenses. These tips are your guide to covering the necessary aspect of your accounts. That way, you won't get lost once you move your shop from a weekend farmers market to your official store address.

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