Accounting

Journal entries accounting for the sale of product are slightly more complicated than selling services.  When you buy product you do not incur an expense. You only incur an expense when you sell it.

When you buy product you actually convert one asset, cash, for another asset, inventory.  So assume you purchase 50 bottles of supplement for a cost of $10/bottle.  The journal entry will be: 

This brings us to the most important financial statement that we can keep in the business, the Cash Budget. You will be pleased to hear that this is also one of the most simple statements to prepare, but unlike the income statement and balance sheet which are historical statements, the Cash Budget is a forecasted statement usually prepared monthly for the upcoming month, 6 months or year.

The two basic financial statements in a business are the Balance Sheet and the Income Statement.

The Balance Sheet shows the assets of the company on the left (what the company has, or debits.) It is then balanced on the right, by the other side of the story (where the company got the money, or credits.)

Learn the Lingo
Like medicine, business has its own language and it helps to speak it a little. There are lots of basic accounting books, such as Accounting for Dummies. The following is a brief introduction to accounting you might find useful.

Money In and Money Out

Accounting is more than reconciling numbers and writing cheques – successful financial practices rely on developing office systems that work for your practice. The best time to do this is one month after you open your clinic doors. Your patient numbers might be low at this time which you should provide you with a terrific opportunity to start creating an effective accounting system.

5 months before Open a business bank account You will need your business registration papers for this step. Purchase a bookkeeping system or interview and hire a bookkeeper So-called “One Write” systems are good