The record keeping part of business is definitely boring. Entrepreneurs deal with it by procrastinating or paying someone else to do it. True. There are financial records that can’t be prepared without a background in bookkeeping. But most of it, all of us can do. This is good news to help you save money in your small business and maintain business secrecy.
The most important thing about financial records is that they ease your job of monitoring the business. If you know what’s going on then you’ll always make better decisions. Isn’t that what running a business is all about? It seems unbelievable, but many small business owners in Kenya don’t keep reliable records. So, they never really know where the business stands and where it’s going. We hope this isn’t you.
It’s not like they shun the duty. Even procrastinators eventually get things done. But at a great cost. The reason banks complain that small businesses present poor records is because many honest entrepreneurs are not sure of what to put down and how to do so. Not everyone had the fortune, or has the patience, to sit through accounting class. And you know how boring the teaching style is (with all due respect, we love lecturers).
Unfortunately, entrepreneurs can’t escape this. You can’t necessarily figure out your own unapologetic style of preparing financial records. You can do so in the other fun areas of business like marketing and, I guess, the your personal life. Your money records have to be perfect. Otherwise, of what use will they be? They also need to be professionally done – not just your eyebrows. The reason is outside parties, like investors and banks, have to figure out your business at a glance. Can you imagine how much longer a loan approval would take if every entrepreneur presented financial records in a different style?
Nevertheless, you really shouldn’t feel that much pressure. Small businesses only have to do the basics in bookkeeping. Of course there are other types of records like those dealing with compliance, banks and your employees. But can we do that another day? For now, what you need to know are the 9 major financial records you need to maintain in your business.
We’ve even listed them in the order they are prepared. We’ve also shared a list of links for each of them. There, you’ll find templates and other information like how frequently you should prepare each. Anyways, if we missed something and you’ve got a question we’re here.
First, here’s an infographic summarizing all of them;
Here’s the list;
BONUS** One more thing you need to complete your financial statements
