Guest Contributor | Jun 2, 2022 | 0
The back of a cigarette box no longer good enough for keeping records
Mbo Luvindao, the Manager at Bank Windhoek’s Emerging Small and Medium Enterprises branch, said it is essential that small enterprises keep records, even if it may be costly in the beginning, or their owners are unsure which records are required by law.
“Record keeping is very important in all businesses. Small and medium sized businesses also need to ensure that they keep proper and accurate records of all business related activities” he said pointing out that both financial records and staff records are statutory obligations.
Staff records include employment contracts, performance evaluations, remuneration and leave of absence. These are essential for small business management. In addition, proper employee record keeping is a requirement under the Labour Act.
“Though some small businesses discount the importance of proper financial record keeping because they do not see the need for it or lack the necessary skill to record transactions; it is vitally important to the survival of your business. Banks and other financial institutions will want to assess your business’ performance before they provide a loan, overdraft or other facility. This assessment is primarily based on your financial statements. By not keeping proper financial records in your business, you are sending a ‘high risk’ message to your bank” said Luvindao.
He emphasized that financial records are also required by law for tax purposed. “If your business should be paying tax and you are not paying it, you will incur penalties that may cripple your operations,” he said
There are numerous accounting programmes available but a basic understanding of bookkeeping is vital for the effective use of the software. In most instances, cost is also a hurdle in acquiring the software, so many small businesses still record transactions by hand. Using a simple, open-source spreadsheet which is fully compatible with Excel, works well and the cost is zero.
“The method of record keeping will often depend on the size of your business and the complexity of your transactions. There are numerous short courses in bookkeeping offered by learning institutions that can greatly improve your bookkeeping skills and enable you to successfully manage your business’ finances” stated Luvindao.