HOW TO KEEP RECORD OF YOUR BUSINESS

ABSTRACT:
Record keeping in businesses are as important as the business itself. The act of record keeping assists the owner to assess the progress of the business. The absence of record could hinder expert's assistance when need be. Business owner need to follow a systematic approach to get acquainted with record keeping in their businesses.

ARTICLE TEXT:
Recording keeping in business is as important as the business itself. No business starts without first initiating the business idea. This if followed by sourcing for finance to take the idea to the next level. Both the idea and the application of finance for taking the business to the next level ought to be put down on paper. When business idea is written down, one can compare new ideas with the previous ones. This would lead to better reasoning. Ideas not put on paper can hardly be compared because no one would be able to make distinction among several ideas in one’s head. The same thing applies to application of finance otherwise known as financial transactions. Adequate record keeping of business and financial transactions would enable an investor track wrong decisions for correction. The benefits of record keeping in business cannot be overemphasized. However, it is unfortunate that most entrepreneurs consider it easier to keep business records in their heads undermining the risk of forgetfulness. The following method could be adopted for record keeping of your business:
 Any potential investor should consider buying a small thick back notebook or open a computer page in which business ideas could be recorded once they occur.
 Try to describe the ideas properly immediately as you are thinking about them. Such description should relate the ideas to the amount of money you have at hand that can be applied in the business. You may also include possible areas finance could be sourced with relative ease.
 Consider writing down the location of the business and describe the potential customers. This would assist you in the future when expansion is being considered.
 Take note of the initial and subsequent amounts applied in the business including transportation and other expenses you may consider small. There are no small expenses in business.
 Ensure private items brought into the business are recorded, that is the level of usage. You may not be able to apportion the degree of involvement of such items between private and business use in terms of cost but the record would assist expert to do so.
 Obtain receipt for your purchases were possible and write down any purchases were receipts cannot be easily obtained.
 Ensure that all cash received are acknowledged by receipt and encourage your clients to ask for it after cash payment.
 Document credit transactions immediately. Do not rely on your memory, it could fail or some clients may deny such transactions when they know you do not keep proper records.
 Consider employing an assistant for the purpose of record keeping if you are too busy or engaged in another job.
 Separate notebooks could be used for sales and purchases recording. Transactions must be properly described whether it was cash or credit. Remember that cash sales must be issued receipt while receipts must be obtained cash purchases. The receipts issued or received collaborate the information on business records.
 Office flat files could be used to keep documents in sheets together and properly titled for easy location.
 Ensure that records are not tampered with by anyone. To achieve this, keep records under lock and keys; do not use correction fluids to erase error instead cancel out neatly with a single stroke of line. The cancelled item should still be visible.
The above is a simple approach to business record keeping which can be done by anyone. However, businesses keep more complex records using professionals. The professionals advise entrepreneurs on the accounting system to use for record keeping depends on the resources at their disposal. There are two basic accounting systems: manual and computerized accounting systems. Both are similar and produce similar results. The procedures described above are the basics. The entrepreneur may invite an expert to translate them into formal system as the business grows.
Basically, accounting system comprises of sub systems viz: Sales, Purchases, General Ledger, Payroll, Inventory, Fixed Asset. Each could be further divided into sub systems. The accounting system generates accounting information for managerial use. Accounting information system is the bedrock of management information system. Therefore, businesses may find it difficult to function properly without putting in place adequate and functional accounting system.
In a manual accounting system, the sub systems could function in form of books of accounts while in computerized system, they function in form of modules. The manual system follows the double entry principle in recording transactions. The accountant operating such system would be responsible for ensuring all accounting principles are obeyed. In this case, computerized system appears to be easier since the software developer would have taken care of all that at the design stage.
The role of professional accountant would be to identify the necessary books to be opened in accordance with the sub systems mentioned above and more as may be required by the business. On the other hand, it is instructive to say that accounting software does not fit every business outfit. Similar to the role of professional accountant in installing a manual system, he assists businesses to identify accounting software with adequate modules for the organization under consideration. Note, that anyone can operate the computerized system while the manual system requires a lot of judgment and experience which may be possessed by someone with knowledge of accounting. The individual may not necessarily be a professional but should be willing to learn on the job.
The procedures above are sufficient for any entrepreneur to kick off his investment plans. I wish you good luck as you see the need to keep record of your business transactions.