ENTREPRENEURSHIP Lecture No: 38 BY CH. SHAHZAD ANSAR

PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS

RECORD KEEPING It is necessary to have good records for effective control and for tax purposes. The entrepreneur should be comfortable and able to understand what is going on in the business. With software packages, much of the record keeping can be maintained on a personal computer. The goals of a good record keeping system are to identify key incoming and outgoing revenues that can be effectively controlled.

Sales (Incoming Revenue) It is useful to have knowledge about sales by customer both in terms of units and dollars. The entrepreneur of a retail store might try to identify the profile of the type of customer that patronizes the store. Retailers also like to have information on specific customers. Credit card purchases can be tracked for information on the type and amount of merchandise purchased. An Internet venture can maintain purchase history data on the types of produces purchased. Customers’ e-mail addresses can be requested so the customer can be notified of sales. 4

Sales (Incoming Revenue) Contd.. Some Internet firms have established a free membership as a means of following up. In a service venture, records would need to be maintained on when a customer paid their monthly fee. Record keeping of payments can either be handled by a computer software package or a simple card file system. If payments are late beyond a reasonable time, it may be necessary to hire a collection agency, but only as a last resort.

Expenses/Costs (Outgoing Revenue) Records of expenses are easily maintained through the checking account. It is good business practice for the entrepreneur to use checks as payment for all expenses in order to maintain records for tax purposes. Canceled checks provide proof of payment. In the early stage, it may be desirable to make all payments on time to establish credibility with suppliers. The entrepreneur should maintain information about employee either in a software program or in a card file.