2 Binders Needed: Invoices/Purchase Orders/Order Forms (copies of forms) Sales Journal, Accounts Receivable (Excel spreadsheets)Purchases (copies of forms)Purchasing Journal, Accounts Payable (Excel spreadsheets)Cash Receipts and Payments Journal (Excel spreadsheets)Inventory Log (Excel spreadsheets)Tax Forms (copies of forms prepared in Excel)Payroll (Excel spreadsheets)Bank Statements (copies of bank statements)
3 RECORDING A SALEOrder information is entered into the SALES JOURNAL, ACCOUNTS RECEIVABLE RECORD and the INVENTORY RECORDS.You receive a PURCHASE ORDER or an ORDER FORM (through your website, mail, or fax).Staple the PURCHASE ORDER/ORDER FORM and INVOICE together and file in a binder in numerical order by Invoice.The Accounting Department creates an INVOICE.Send the Invoice to the customer.Order INVENTORY when needed.Note: Review the Invoice binder periodically and send out overdue reminders.
9 MAKING A PURCHASEYou receive an invoice from the company. The Accounting Department records the information in the PURCHASES JOURNAL, ACCOUNTS PAYABLE RECORD, AND ACCOUNTS PAYABLE CONTROLLING RECORD.Your company completes a PURCHASE ORDER from another company and sends it out. Keep a file copy in the PURCHASES binder.The invoice and the original purchase order is forwarded to the Bank Manager.If the purchase was for inventory, update the INVENTORY RECORDS.The Bank Manager pays the bill, marks it paid, and files it.
10 Purchasing Journal One purchase DATE VENDOR INVOICE # DESCRIPTION AMOUNT121-OctVEC Tradinglamps725225-Oct825329-Oct4504
12 Accounts Payable Controlling Record Total Amt.DATEVENDORBALANCE1VEC Trading234
13 Value of Inventory on Hand Inventory RecordItem Name:Budget lampsInventory LevelItem #:Minimum:Description:Maximum:PurchasedSoldBalanceDateUnitsUnit CostTotalCost of Goods Sold21-Oct1010023-Oct66044025-Oct202002424027-Oct1717077029-Oct27270Value of Inventory on HandTotal Units on Hand
14 Value of Inventory on Hand Inventory RecordValue of Inventory on HandItem Name:Standard LampsInventory LevelItem #:Minimum:Description:Maximum:PurchasedSoldBalanceDateUnitsUnit CostTotalCost of Goods Sold21-Oct102525023-Oct4100615025-Oct1640027-Oct820029-Oct18450Total Units on Hand
15 Inventory ControlValue of Inventory on Hand linked from Individual RecordsQuantity of Inventory on Hand linked from Individual RecordsDATEITEM NAMEITEM #QUANTITY ON HANDCOSTTOTAL1Budget lamps272702Standard Lamps184503Deluxe lamps7525456
16 RECORDING CASH RECEIPTS AND PAYMENTS The Accounting Department records ALL transactions in the CASH RECEIPTS AND PAYMENTS JOURNAL in the appropriate places (as payments or receipts of cash and an explanation).Each week the Bank Manager prints out a copy of the current bank transactions.If one of the invoices that you sent out has been paid, retrieve the invoice from the binder, mark it paid, and file it. Update the ACCOUNTS RECEIVABLE RECORD to reflect the payment.Any invoices that your company paid another company (because you purchased something from them) is updated in the ACCOUNTS PAYABLE RECORD.
17 Cash Receipts and Payments Journal Enter in the Receipt or PaymentEnter in the Explanation
18 Accounts Receivable Record Enter in payment receivedCustomer:Lizzie GrubmanDATEINVOICE #INVOICE AMOUNTAMOUNT PAIDINVOICE BALANCE123-Oct532.2623
19 Accounts Payable Record Enter in amount paidVendor Name:VEC TradingDATEINVOICE #INVOICE AMOUNTAMOUNT PAIDINVOICE BALANCE121-Oct725725.00225-Oct825329-Oct45045
20 PAYROLLThe Payroll Associate completes the PAYROLL REGISTER for the pay period. The original is filed in a binder and a copy is given to the Bank Manager.The Payroll Associate creates and distributes pay stubs.On the 15th of the month, the Bank Manager submits and pays the 941 tax form for the previous month. All tax forms are filed in a binder.The Bank Manager pays each employee.Note: Payroll is completed twice a month.
22 SUMMARYAccounts Receivable, Accounts Payable, and Inventory Records are updated as needed.Payroll is completed twice a month.Bank Statements should be printed out at least once a week.Cash Receipts and Payments Journal should be updated each time a bank statement is printed.Tax Forms should be completed according to the calendar.941 – monthlySales tax – quarterlyW2 and W3 – yearly1040 individual tax return – yearly1120 Corporate tax return – yearly