Complementary RecordkeepingComplementary recordkeeping is a subject you will not read much about anywhere else, because it is never mentioned in classrooms, and people who have never owned an active small business ignore it. In just about every small business, financial statements are not timely enough to help you with your day-to-day operations. That is not the purpose of financial statements anyway. Financial statements are "reports," they tell you about your past. What you need is a system that presents to you what is happening today—maybe this hour. This is especially true in the early days of your startup. Cash will be at a premium and you don't want to waste a single cent. This is where complementary recordkeeping becomes necessary. 
So, how do you best track the daily finances and operations of your small business? This is where you need to be innovative and create your own little "hip-pocket" system for tracking what goes on in your business each day.If your business is simple and straight-forward, say like the coffee cart example we have used in a couple of reports, there is not much more you need to do beyond the simple daily recordkeeping system previously recommended. You might, perhaps, want to set some upper limits on how much inventory you want to keep on hand, and not let expenses go beyond this limit. Other than that you pretty much have a good handle on your daily information, and you don't need any complementary bookkeeping. When businesses are somewhat larger than the coffee cart example, it becomes a little more interesting. You may be able to track things like: daily phone inquiries vs. sales…or daily sales as a major marker for future profitability (depending on discounts given to get the sales)…total hours worked…shipments…mood of your employees…the weather, and/or any other "marker" you can relate to performance of your business. Many business owners carry a small spiral notepad around to record these special markers so they can develop and study daily trends and establish norms. This is not to say you don't need a complete small bookkeeping system—because you do. And you need your small business financial statements completed in a timely fashion for all the other required analyses. But to keep your fingers on the pulse of your business, you need to develop much more timely complementary recordkeeping and immediate analysis. For those of you who are not sure you want to start a business from scratch, the next section of this website deals with purchasing an already operational business. Businesses are bought and sold everyday, and it may be something you want to consider. The next section discusses the pros and cons, potential pitfalls, and tips on buying a business. You can access Buying a Small Business here. Return to Top of Page Proceed to Buying a Small Business Return from "Complementary Recordkeeping" to Small Business Accounting to view the "List of Reports for this section" Return to Home Page
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