Keeping track of your business income and expenses is an essential part of running a successful company. It’s the best way to ensure that you know exactly what money is coming in, and what money is going out. By understanding your financial position and where your money is being spent, you can make strategic decisions to increase profits and improve efficiency.
It involves recording all incoming payments and outgoing costs as they occur, such as rent, insurance and advertising expenses. At the same time, you must record every purchase made and every sale made. When done correctly, tracking business income and expenses provides you with valuable financial insights into your company’s performance. It allows you to understand your profits, losses and overall cash flow – so you can make informed decisions about how to best manage your finances.