Please don't think I am calling you a "moron"
to hurt your feelings in any way. I was a moron
when I first started setting up my files. I hated
accounting in school and am the type that would
much rather add 2+2 on a calculator than in my
head -- but you have to do it. You have to force
yourself to do it NOW -- right at the beginning!
Many of a business has collapsed simply because
they lacked organization in their basic accounting
business practices. Don't be one of them!
As a small mail order business you don't have
to really do much in the beginning. Here is how to
set up your files from ground zero:
1.Take out a hanging file folder
and a label of any kind. (Hanging folders and labels for them
can be purchased at
K-Mart, Wal-Mart and any office supply store.)
2.Type or hand print "Receipts" on the label and place it on the hanging folder.
3.Now, place 5 MANILA file folders
inside the hanging file folder (which you labeled
"Receipts") and label
each of the manila file folders with the following headings:
1.Advertising
2.Postage
3.Office Supplies
4.Utilities and Rent for the Office
5.Miscellaneous
You now have one large hanging file folder with
5 separate manila file folders inside it. Carefully
place your hanging file folder in your metal
file cabinet or cardboard banker's box. (A banker's
box can be purchased at any office supply store
also and normally cost around $4.)
Now, wasn't that easy? Some of you reading this
will think that I am attempting to insult your
intelligence. This is NOT my intention. This
report is broken down in a simple, step-by-step way
so everybody can understand it -- regardless
of their previous knowledge and experience.
Remember, some people have never worked in an
office their entire life. What seems simple and
accepted to some of us, may be something another
person would never have known.
Okay, let's go back to where we were. You now
have one master file completed and we're ready
to make another just like it. This time we'll
name the hanging file folder "Income" and label 3
manila folders inside it with the following headings:
1.Completed and Shipped Orders
2.Inquiries and Correspondence
3.Open Orders Still Pending
See how easy? From now on, you simply make another
folder as the need arrives and you're files
will always be easy to maintain. (Once you get
this concept down pat -- you can easily think
about getting a computer. A computer organizes
its information in the SAME manner. Believe me
-- this same system works! You'll be amazed at
how many mistakes it will help you prevent.)
Yes -- bookkeeping is a very simple process. All
you have to do is keep the system going. For
instance, every order that I process, I completely
finish before moving on to the next order.
Example:
1.Mail is received and opened. As
each piece is opened it is placed into individual piles.
Orders with pre-payment
are placed in one pile, information and daily correspondence in
another, and so forth.
2.Each order that has been pre-paid
for is processed first -- with each one being processed
individually to completion.
(That means it is in an envelope, a label typed out and the
completed order is ready
to be mailed at the post office.)
3.During the process, the "date,"
"amount of check or payment" and "product ordered" is
recorded on the outside
of the envelope -- making sure the customer's full name, address
and telephone number
(if available) is on the envelope too.
4.Just before closing up the office
for the evening, the envelopes are then keyed into the
database on our computer
(you can substitute a computer for the hanging files in the
beginning.) We record
all the information that was written on the envelopes during the
processing of the order.
(Don't think you will remember "what" the order was. That
thinking will open you
up to make human errors.)
As your business grows, your understanding and
abilities will grow also. At that time you can
grow into a more sophisticated means of keeping
the books.
In the meantime -- keep good records. They are
the lifeblood of any business and can eventually
make or break you. You'll thank yourself in the
long run.
