Understanding the topic
Sales record what you supplied to customers. Collections record money received. Track credit customers separately so you can see who still owes you.
Why this matters
The difference helps prevent double-counting income and makes follow-up with customers easier.
A practical example from Ghana
A Kumasi trader sells goods for GHS 800: GHS 500 is paid immediately and GHS 300 is owed. Record sales of GHS 800 and a customer balance of GHS 300. When that balance is paid, reduce the amount owed. This example excludes tax and cost of goods.
Illustrative example; this does not describe a BrightEdge client.
Common mistakes
- Counting collections on old invoices as new sales
- Putting personal purchases into business expenses
- Leaving mobile money charges unrecorded
Recommended actions
- Use a daily sales and receipts log
- Keep business spending separate
- Match records to statements each week
- Review outstanding customer balances
Educational video
Video lesson coming soon. Read the written explanation, example and practical actions in this lesson.
Keep learning from reliable sources
General business education. Confirm current rules and seek advice for your circumstances before making tax, legal or investment decisions.