How to Separate M-PESA Sales, Expenses and Transfers
Not every M-PESA transaction is a sale. Some transactions are expenses, transfers, withdrawals or customer balance payments.
Sales increase business income
A sale happens when a customer pays for goods or services. These should be counted as income.
Expenses reduce profit
Payments to suppliers, staff, delivery riders or service providers are expenses. They should reduce profit.
Transfers move money between accounts
If money moves from M-PESA to bank, cash to M-PESA or one till to another, it is a transfer, not a new sale.
Wrong categories create wrong reports
If transfers are recorded as sales, revenue will look too high. If expenses are missed, profit will look too high.
Accurate categories make your business reports much more useful.
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