Proper Bookkeeping, the Challenge of Entrepreneurs

By Chukwuemeka Ayogu | 2 min read
21st June 2019
Proper Bookkeeping, the Challenge of Entrepreneurs

An average entrepreneur has a handful of activities competing for his/her limited time. One activity business owners wish they could do better is bookkeeping. Technology has advanced and information is available almost everywhere yet proper bookkeeping continues to be a huge challenge for many entrepreneurs. The result from Google using google trends shows that the search for bookkeeping reached its peak (100% searches) at April, 9 2019 (See Interest over time on Google Trends for Bookkeeping - Nigeria, Past 12 months) 

Proper Bookkeeping is the process of recording financial transactions of a business in an orderly manner consistently such that the records kept can be used to make decisions.

The Consequences of Improper Bookkeeping

Legal Costs

For example in Nigeria, "…every taxpayer is required to keep proper business records which reflect a true and fair view of their business at all times" If you go against the law, the authority charges penalties for non-compliance which is not good business growth.

Inaccurate Business Decisions

You cannot make accurate business decisions without having the right data.

Business Failure

Some cases of business failure can be traced to lack of proper bookkeeping e.g. Some entrepreneurs cannot differentiate revenues from profits as a result they assume revenues to be Profits, thereby overstating their profits.

Inability to measure performance

The performance of every business is fact based. You cannot have the right data to measure your business performance if there is no proper bookkeeping. This makes determining the financial health of the business difficult

Cash flow problems

Just as blood is to human body system so is cash to business. A business cannot survive if you cannot manage the business cash flow ( cash coming in and cash going out).

Simple Bookkeeping Strategies For Entrepreneurs

As entrepreneurs you can keep your books entrepreneurs by either using accounting software or physical books set up to fit your line of business some examples are highlighted below: 

Cloud based Bookkeeping Software
Cloud based bookkeeping is the bookkeeping that is done online, it is internet based. The records can be accessed anywhere in the world as long as there is internet connection.

There are a lot of software that are cloud based such as Accounteer, Sage, QuickBooks, Manager, FreshBooks etc

Steps to get a Cloud based Bookkeeping Software
1) Download the application from Google Play Store.
2) Sign up through e-mail to learn how to use it or go to YouTube to learn with the video.
3) Contact a bookkeeper/accountant to set up your account and take you through the training to avoid wasting time.
Note: Accounteer has a free online software with limited number of invoices issuance in a month.

Offline bookkeeping software

Offline bookkeeping is the bookkeeping done without internet connection. Once the software has been downloaded and the account set up is done. It can be used as long as the device/machine upon which it was downloaded is with the user.

The operation is the same thing with the online bookkeeping. The only difference is that subsequent additions of new features by hosting company will only be applicable to the online version of the software. Also the information cannot be accessed anywhere except on the device it is installed in.

Bookkeeping on Books

This is bookkeeping done using different physical books to record transactions as they occur with their dates, details, amount (cash and cash equivalent) etc.

The books used for bookkeeping are always prepared in a customized form to suit the individual business owners needs to ease the stress of bookkeeping. 

In conclusion, there is no substitute for proper bookkeeping irrespective of the size of the business. The progress of every business can only be measured through records properly kept. Therefore, where there is no proper bookkeeping, there is no measure for progress.
 

Chukwuemeka Ayogu
Chukwuemeka Ayogu is the founder and principal partner of Countsystem, a service provider in accounting sector in Nigeria, bsiness systems and controller services. He is an Accountant Partner of Accounteer, a cloud based accounting software. He is an experienced service provider with diverse working experiences. He has worked in customer service at Regional Business Unit Nigerian Breweries Plc, Customer Service Representative at Diamond Bank Plc, Principal Partner at Prudential Auditors & Consultants, State manager at Chijgz Resources International and more. Chukwuemeka is passionate and committed to building micro and small businesses that will have global relevance.
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