Income and expenses log should be created by petty traders. It helps determine how your business does and how it grows. It will also help you expect your business. Your decisions are based on it.
In this article, I’ll be showing you how to make a replica of an income and expense log. An income and expense log is to be analyzed on weekly basis.
I will use the case of Charlotte(not here real name) sells honey to people.
CHARLOTTE’S INCOME ANDEXPENSE LOG FROM 21ST TO 26TH NOVEMBER, 2016
Cash balance = ¢1,200
Now Charlotte expense and income log interpret.
--> On Monday, she traveled to a village to buy the honey from the wholesalers. Her cash balance was ¢1,200.
So she bought 60 gallons plus containers for the retailers which cost ¢600. Her T&T was ¢60. She was left with ¢550.
--> On Tuesday, she made sales of ¢800 from some of the honey she sold to her customers. Which was recorded as income for her? So she added her sales to her balance from yesterday. Of which rose her cash balance to ¢1,350 on that very day.
--> On Wednesday, Charlotte made sales ¢450, of which was also added to cash balance. But on this day, she paid herself ¢300. That’s her weekly wage.
--> Her honey got finished on Wednesday and on Thursday, she endeavored to get new and fresh ones. In doing this made her lose that day's customers. But she told them not to worry and that she would take the honey to their doorsteps tomorrow. So she bought honey and containers costing in all ¢800 plus her transport which was ¢50. At the end, her cash balance dropped to ¢650.
--> The next day which was Friday, she sent to distribute some of the honey to her customers as promised. She came back to sell some again at the store. She made sales of ¢750 and transportation of ¢10 which is an expense.
--> On Saturday too, since people usually don’t walk by the store. She visits her customers from house to house, shops to shops etc. and comes by the shop later in the evening. She made sales of ¢600 and an expense of ¢10.
Charlotte couldn’t sell all the honey she bought later, so she made plans to sell the rest the following week. So she got part of her cash balance this week and would complete the rest the following week.
This procedure can be applicable to petty traders or sole proprietors to access their effort in their businesses. I hope this helps you a bit.