The overlooked documents that can make or break your business finances.
Recently, a new client contacted me for my financial advice. The client has just launched a new online business with plans to expand it to multiple locations and offer digital products.
As he took the time to explain his vision, I was so impressed with his motivations. But then I quickly asked a straightforward question:
“How do you plan to monitor your income and expenses?”
He hesitated for a while and was short of words, but managed to reply:
“Honestly, I only write down all my sales and expenses in a diary”. Right there, I knew that the man had skipped a vital part of the accounting process.
This means he lacks insight into the relevance of source documents in accounting. If the client takes no action, it can lead to the loss of business since they may not know where their business data is stored.
Why Source Documents Matter to a Freelancer
In accounting, source documents are the original pieces of evidence for every financial transaction.
Some transactions cannot be classified as financial transactions, such as receiving an order without payment…
Source: The Top 10 Source Documents in Accounting Every Freelancer Must Know.
