One of the differences between keeping track of household cash flows and enterprise accounting is the absence of audit, norms and rules for keeping it. That is, you choose for yourself the form of keeping records, the sources of the budget, the expense items, and the period for which to prepare reports and carry out analysis. But if you prefer online home accounting, our service uses the calendar month as the reporting period.
This period is the most convenient, because it is within a month that we receive regular income and make the main expenses. When keeping monthly records it is easiest to calculate the balance, since only current figures need to be used for it.
No less important in a system such as home accounting is the long-term report. As a rule, its period is a year. Like the monthly report, it consists of two parts:
- totals;
- planning.
The summary report is drawn up on the basis of the combined short-term reports for the previous 12 months. As a rule, it lets you analyse whether the level of your financial state has risen over the reporting period and, if so, by how much.
Financial planning of the annual report is a plan for the following 12 months, which will include not so much current expenses as the possibility of creating or increasing reserve and savings funds. It involves drawing up a calendar of events that require the use of funds from these sources, as well as a preliminary calculation of the amounts that need to be saved by a given moment next year.
In principle there is nothing complicated about it, because almost everyone makes a list of plans for the coming year on New Year's Eve. In this case you simply need to convert them into a monetary equivalent. That is, if you plan a vacation in June, you need to decide what sum you need to collect by then and enter it in the plan.
There are also interim reports. They are worth preparing after sudden large expenses or, conversely, after receiving unexpected income.