Today let me share with you a write-up I first shared about four years ago.
In the words of Andrew Griffiths, the famous Australian entrepreneur, ‘I remember my first visit to an accountant. I had three years’ worth of business records crammed into three shoe boxes. My poor accountant! Since then I have well and truly learned the lesson of keeping good records.’
Now, many small and even some medium scale business owners do not see the need for record keeping. General record keeping and bookkeeping sometimes appear to be a bother – of course, you think you can always get an accountant or someone at the end of the day to do the job for you. If you have ever had the experience of handling huge fee notes – the type that makes you feel real pain – from the accountant, for something you could have done easily but ignored, then you know what I’m talking about. You don’t need an accountant to maintain basic books of accounts and other records for you. However, why all the talk about bookkeeping?
I guess those are enough reasons for you to take bookkeeping seriously. The opportunity cost of not keeping books is very high. Common books of accounts such as the cash book, sales book, purchases book, fixed assets register, and also subsidiary books such as debtors and creditors ledgers are vital. Other records depend on the nature of business.
Of course in this computer age you can easily opt for a computerized system to do this. It doesn’t need rocket science to use simple ones. But don’t use the unavailability of computers or appropriate programs to avoid keeping books of accounts.
Remember – don’t keep records in shoe boxes. File documents. Write or maintain books of accounts – computerized or manual – and do it consistently. Beyond books of accounts you also need other records. Seek guidance if you need it.
The Wise Entrepreneur