Establish the opening position
List cash introduced, equipment bought, stock held, amounts owed to suppliers and any owner-paid business costs. Preserve dates and evidence. Capital introduced by an owner is not a customer sale.
Keep a separate record for personal drawings and owner reimbursements. If money passes through a personal account, identify each business movement and discuss the opening treatment with an accountant rather than treating the whole statement as business activity.
- Choose the start date and identify opening assets and obligations.
- Create a document index and consistent transaction references.
- Assign who records activity and who answers missing-document questions.
- Agree a monthly cutoff and review cash, customer and supplier balances.
Choose records that match the business
A service business may need time/project references and customer invoice tracking. A shop also needs a stock record and a cash-sales trail. Start from your actual transaction types instead of copying a chart of accounts from an unrelated business.
A money-in/money-out sheet can help organise evidence, but it does not by itself provide a complete accrual ledger. Opening balances, unpaid invoices, stock and depreciation may need additional records.
Keep the first month reviewable
Retain supplier invoices for setup costs and distinguish equipment, stock and recurring expenses. The final accounting and tax treatment depends on the applicable framework and circumstances.
Review the first month while events are still easy to explain. A short exceptions list is more useful than leaving uncertain entries to accumulate for a year.
Worked example
Track setup cash separately from revenue
Illustrative owner contribution LKR 500,000, equipment payment LKR 180,000 and opening stock payment LKR 120,000. No sales or other payments occur.
- Setup paymentsEquipment plus opening stock cash.
- LKR 300,000.00
- Cash available after setupOwner contribution less setup payments.
- LKR 200,000.00
LKR 200,000 remains in cash, and no sales revenue has been assumed. The purchased assets need their own records and accounting review.
Frequently asked questions
Can a bank balance show the startup's profit?
No. Owner funding and asset purchases affect cash without being ordinary sales and operating costs. Keep the supporting categories separate.
Does this guide register a business?
No. It explains records. Registration, legal structure and statutory obligations need separate verified guidance.
Sources and limits
This guide does not establish registration, tax, legal or depreciation rules. The examples are fictional.
- Finance Desk LK — current service scope
Current service boundaries. Confirm the work, exclusions and quotation in writing before an engagement begins.
Accessed: 2026-10-08