Proper and Constant Book-Keeping in any Business is one of the sure way to avoid taking that free flight to crash your business. Book-Keeping helps you ensure Proper Business Management. In this article, I have listed out some of the key importance of keeping records in your business. This article is focused on BOOK-KEEPING FOR SMALL BUSINESSES.
Record keeping is what the Accountants call Book-Keeping
- Bookkeeping, in business, is the recording of financial transactions.
- It is part of the process of accounting.
- There are two common methods of book-keeping
- The single-entry book-keeping system; and
- The double-entry book-keeping system.
- It does not matter what name you call it, any process that involves the recording of financial transactions is a book-keeping process.
- Proper Book-keeping is important to any business that wants to succeed and grow.
The Importance of Proper Bookkeeping
- Like Your Medical Records with Your Doctor! Book-Keeping is an Essential thing to do. Imagine if your Doctor don’t keep records of your Medial History. Just Imagine!
- Like a Plane Crash! Without proper bookkeeping, your business could very quickly and easily crash into a wall.
- Like Your Engineer making a mistake in your Building Foundation! Don’t make that costly mistake in your business. Finance is key. Why do you think Big Corporations invest so much in Accountants and Financial Officers? It is to avoid costly Mistakes.
- Like Planning for your Wedding! It is funny how we detailed everything we need for the big day. Why do you make such details? I guess it is to enable you plan properly for your guests. Book-keeping in Business is one of the first thing that enables you plan your business properly.
- Like checking your blood Pressure! When last did you check your blood pressure? You better check it regularly! Book-Keeping in Business helps you to analyze the financial state of your business at every point in time.
- Like Checking the League Table! If the League Organizers do not keep proper records of Wins, Loses & Draws how will you determine the Teams that are at Top and Bottom table. Book-Keeping in Business helps you to determine if you are making profit or loss. A lot of small businesses confuse Cash for Profit.
MUST I HIRE A BOOK-KEEPER?
- It depends on the level at which your business is. In essence, every business needs a book-keeper no matter the level. However, not every small/personal business can afford an extra hand in the area of book-keeping.
IF YOU CAN, HIRE A BOOKKEEPER NOW! AND IF YOU STILL CAN, EMPLOYEE A REAL ACCOUNTANT TODAY!
SO I CAN’T HIRE, WHAT SHOULD I DO?
- BE YOUR OWN BOOKKEEPER!!!
- IF YOU DON’T HAVE ANY FORMAL KNOWLEDGE OF BOOKKEEPING PRINCIPLES (DOUBLE ENTRY), THEN YOU MAINTAIN A SINGLE-ENTRY BOOKKEEPING.
HOW DO I MAINTAIN A SINGLE-ENTRY BOOKKEEPING?
Single Entry Bookkeeping can be manually maintained on a Computer or Note Books.
- Using the computer: MS Excel, MS Word, Notepads, IPad, Etc.
- Using Note Books; Special Book-keeping Notebooks, Cash analysis sheet, Ledger books, Income Notes, Sales Register, etc. These can be bought from the Stationery Stock.
- Any type of Note Books (Exercise books)
- Jotters and Spread-Sheets stationery
WHAT BOOKS SHOULD I MAINTAIN IN MY BUSINESS SINCE I DON'T HAVE AN ACCOUNTANT OR A BOOK-KEEPER?
You should keep the following records in your business;
- Expense Book (For Petty and Office Cash Expenses)
- Income Book (For all Invoices you issue to your Customers)
- Customer’s register (For recording the data and contacts of all your customers)
- Debtors Book (For recording those customers that are owing the business)
- Vendor/Suppliers’ register (For recording the data and contacts of all your vendors)
- Creditors Books (For recording those customers that the business is indebted to)
- Personal Expense Book (For recording your personal drawings from the business)
- Asset Register (For Recording your Fixed Assets)
- Payroll Book (For Recording the Salary structure of all your employees)
- Cheque Book record (For recording schedule of all Cheques leaving or coming into the business.
- Loan Records (For recording all Loans collected by the company and from the company.
WHEN DO I START RECORDING?
- KEEP AN UP TO DATE RECORD OF EVERY OF YOUR DAILY TRANSACTIONS.
- SEPARATE YOUR PERSONAL BANK ACCOUNT FROM YOUR BUSINESS BANK ACCOUNT
- MAINTAIN AN UP TO DATE CURRENT YEAR DIARY. IT HELPS YOU RECORD TRANSACTIONS EVEN WHEN YOU ARE OUT OF OFFICE OR NOT WITH YOUR BOOKS.
GET A PROFESSIONAL TO HELP!
Are you just setting out a new business? Get TIPS FOR SMALL BUSINESS START UPS
We hope this article on Book-Keeping was useful. Kindly Leave a Comment. You Contact Us for Suggestions and Other Questions. Be the first to receive our articles. Subscribe Now! Cheers.