Why record-keeping is vital for SMEs

Mbo LuvindaoAll businesses need to ensure they keep proper and accurate records of all business-related activities. Records vary from files, to staff and financial records.Small businesses should keep staff records to help manage employees. These records will include contracts of employment, performance records of employees, when they started working, etcetera.This information is useful in determining which staff members consistently perform well and may be promoted. In addition to these internal benefits, proper employee record keeping is a requirement under the Labour Law.Another important set of records in a business is your client files. These files record all transactions with clients. This information is useful in determining trends in the buying patterns of your clients, which in turn enables you to custom-design your products and services. This information can be used to identify loyal and profitable customers. It can also demonstrate what customized services will add value to your customer's experience.Businesses also keep vital financial records. Banks and other financial institutions will want to assess your business's performance before they provide it with a loan, overdraft or other facility. This assessment is primarily based on your financial statements. By not keeping proper financial records, you're sending a message to your banker that your business is “high risk”.Financial records are also kept for tax purposes. If your business should be paying tax and you're not paying it, you will incur penalties that may cripple your operations.Tips to make financial record-keeping easier:1.Keep record of all business related income and expenses.2.Keep all bank statements.3.Keep record of all creditors and debtors.4.Keep all yearly tax returns.5.Keep all invoices.6.Keep proof of all salaries paid.7.As the owner, draw a salary or record any funds you take from the business.There are numerous accounting software programmes available that can make life easier when recording financial transactions, but a basic understanding of bookkeeping is vital for the effective use of software. The cost of software could be a hurdle for small businesses. Many small businesses in Namibia still record transactions by hand or use Microsoft Excel.The method of record-keeping will often depend on the size of your business and the complexity of your transactions. Numerous short courses in bookkeeping are offered by learning institutions that can greatly improve your bookkeeping skills and enable you to successfully manage your finances.Keeping proper records of your business operations will therefore ensure that you stay on track and grow your business.

Why record-keeping is vital for SMEs

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Republikein 2025-09-23

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Why record-keeping is vital for SMEs

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Republikein 2025-09-23

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