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Small-Business Books · session 2 of 6 · 30 min
Money In, Money Out
- Keep the simplest honest ledger: date, what, in or out, running total.
- Read a week of entries and answer what the business earned.
A ledger is four columns: the date, what happened, money in or out, and the running total. That is the whole machine. Its power is the last column — it must always match the bank, and when it does not, the ledger just told you something the bank never would: a line is missing.
| Date | What | In / out | Running total |
|---|---|---|---|
| Mon | Starting balance | — | Ⓛ220.00 |
| Tue | Supplies (out) | Ⓛ85.00 | Ⓛ135.00 |
| Sat | Market sales (in) | Ⓛ310.00 | Ⓛ445.00 |
| Sat | Stall fee (out) | Ⓛ35.00 | Ⓛ410.00 |
| Sun | Owner pay (out) | Ⓛ150.00 | Ⓛ260.00 |
Five lines tell the whole week: what selling brought in, what selling cost, what the owner took home, and what the business keeps.
From this ledger: sales brought in Ⓛ310.00, and the business spent Ⓛ85.00 on supplies plus Ⓛ35.00 on the stall. What did the business earn this week, before owner pay?
Work it out, then check
Ⓛ310.00 in, minus Ⓛ120.00 of business costs, is Ⓛ190.00 earned. The Ⓛ150.00 of owner pay came out of earnings — and the ledger shows the business kept Ⓛ40.00 beyond it.
This week
Rule a page with the four columns tonight and enter your last five business transactions from memory or your bank app. Note which ones you could not remember — those are the lines the habit exists to catch.
Next in Small-Business Books: The Invoice and the Wait →