Accounting Records – Most SMEs in Nigeria struggle with keeping their financial records up to date and this affects the sustainability of most businesses. Olamide had a very hort chat with the Executive Director of Ikooba Technologies, Sam Afemikhe a few months ago and he shared 3 very important reasons why small businesses should keep accounting records to avoid failure.
Below are a few more reasons why you should keep your accounting records up to date as a small business owner
- Enables you to manage your business and make it grow: No one knows your business better than you do, but reliable information can only be extracted from the records you keep. If you don’t have good records, it’s much harder to make good decisions.
- Helps to stay organised when dealing with customers and suppliers: Producing invoices, quotations and estimates promptly is vital. An early estimate can be the difference between winning and losing a job. Similarly do not rely on supplier’s statements. You need to know before they tell you how much you owe.
- Makes it easy to prepare management accounts: Have you ever wondered whether you are making or losing money? Management accounts do that for you. You want to know how your business is performing. With management accounts you can compare one period with another, this year with the previous year.
- Helps you plan in advance for tax payments and other liabilities: Tax planning is for everybody. Set money aside when you have the cash. Or make an arrangement with HMRC in good time.
- Record keeping complies with the law: Good record keeping is a legal requirement under the rules of assessment. So, by being organised not only you have all of the above benefits, but you stay within the law.