Starting a Business No 7 - Financial Strategy - No 1 Types of Accounts

Job Club members who start a business must have some idea about accounts. Members who work in a business usually find it useful to have some knowledge of accounts. From a businesss  start-up member's perspective money is the root of all business so you will have to have money for your business activities. It is useful to divide money into the following basic accounts:

1. Capital accounts - expenditure on and receipts from assets which will subsist for some time and occupied or operated by the business, eg buildings, vehicles, machinery, tools;
2. Revenue accounts - expenditure on consumables, and receipts taken from customers for sales or the provision of services;
3. Value added tax accounts - mandatory accounts required when registered for VAT; and,
4. Income taxation accounts - mandatory accounts to arrive at profit for income tax purposes; and
5. Capital taxation accounts - mandatory accounts and/or calculations to arrive at assessments for capital tax purposes.

Two of the other types of accounts you may decide to use for evaluation are:

1. Management accounts - optional accounts used in various ways to evaluate the quality of operations; and/or,
2. Project accounts - optional accounts used to evaluate a particular project(s).

The last two may be important if the business is growing: but the first bunch will begin to swing into action from scratch or within about a year. As indicated, taxation accounts are essential.