![]() ![]() If your business is in the startup phase, you are still trying to see what products or services are going to work and for which clientele and your client segmentation. What is the value of keeping records in terms of understanding your customers? Let’s start with understanding your customer. Separating your personal finances from your business.So let’s take a look at the importance of record-keeping in three major areas Recordkeeping is also about drawing benefit and value in terms of understanding your business now and also in the future. Record keeping is not merely about legal requirements or just the habit of keeping records for the sake of it. Why Record Keeping is Important? Drawing benefit and value from your record-keeping Nowadays they’re many software’s that are available for small businesses to use in record keeping. But you could move to paperless, have systems. So it’s very important to keep that in mind.įor a small business, it may seem difficult, especially if you are writing your transactions in hardcover books. The tax authorities might not be visiting you right now, but they might come in the future and they could request to see your records from as far back as when your business started, or at least see the past six years. It’s good to know that there are penalties for not keeping these records. It is an actual legal requirement that they keep records for a minimum of six years. Know what your business has performed like in that past year, and then move on or plan for the next year.įor small businesses those that are under the turnover tax. ![]() So for instance, for your cash sales, you want to have all your cash sales from January to December, cause then you’re going to wrap up the year. How long do you think business records should be kept for? So simple cashbooks and expense book, an invoice book, clear receipt book, and credit sales, order books are important to have. You’ll get information such as where your business is at, and then in the long run this will help you in terms of the growth of the business. Your records say a lot about your business and so you should review your transactions from time to time. You could also have a book for payments or expenses that you’re making off the business and one for salaries. ![]() You can maintain one book for your cash sales and another for your credit sales. You can also use a simple regular hardcover book to record your business transactions. Nowadays life has become so easy such that they’re many different apps that are available for you as a small business owner to use. Several business owners say I don’t keep records, but I’ve got a great mind! What good record-keeping practices would you encourage business owners to adopt for their business?įor people that think you will remember, there’s a saying that goes, “ the shortest pencil is longer than your memory”. So even if your pencil is 2 centimeters long, just get a book, write it down. If you’ve decided to pay your employees a bonus, write it down as well. It is important to write down what it is you payout as staff salaries. Organize your transactions in box filesĪpart from receipts, you could also keep Invoices, records of salaries that you’ve paid out. Every person that you pay has an agreement, let them sign to say they’ve received X amount of money from you on such and such a day and for what? This shows what it is that you have paid them for. For every service that you pay for, get a receipt. Starting with receipts, for everything that your payout, you should get a receipt. Records of receipts and salaries that you’re paying, as well as records of your taxes, and all other regulatory requirements. It’s simply keeping track of all business transactions that occur as you run your business. Recordkeeping or bookkeeping is the process of taking note of any financial transactions that occur within your business. She is also a recipient of the 2019 Bank of Zambia Governors Award for individual contribution to financial education in Zambia. She is a personal finance educator and banker at Standard Chartered Bank. Joining me to discuss this topic is Mwaba Ngenda. I discuss the importance of record-keeping to a business in today’s podcast. Why record-keeping important for a business? Just like you, Arnold Zimba, who runs a printing and stationery shop in Lusaka also wonders why. ![]()
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