Record keeping key to successful business –part 2
This is a continuation of the first article in which the importance of keeping records in a business was analyzed. We left it at the emphasis that record keeping is not a must in a business, but it represents a key push for success and its analysis. It is important in seeing and tracking the trend of a business.
You can read the part I article here, Control your venture by keeping a business record.
The question that lingers in young business persons’ minds is how and what should be kept in a business record.
- What business records entail
Business records vary from a business person to another, a business type to another. What is important is for the business to ensure it has all the key information well kept for reference purposes.
What a record should entail also depends on the complexity or simplicity and the width of the business. Smaller businesses are more likely to have less detailed records than bigger ones. Below are some of the classifications of business records, in them types of information to be kept
Client based records.
These intend to communicate to the business person or owner data relating to the customers of a business. This includes client names, locations, contacts, their interests and preferences as far as a business is concerned and any other facts that relate to a business.
Employee –based records.
This is especially in well established set ups , that have some other persons/person brought on board to see the success of a business.
The business owner has to keep records of the staff personal details like official names, residence and official contacts, contract details –if there is any,
Salary records also come in handy at this point.
Sometimes a business can also have contracts with its clients, suppliers, partners –in case of a partnered business, financiers etc. Such should also be well documented and stored.
Accounting and Tax Records
A business must respect the laws and regulations of a country. Any business person is majorly first of all a citizen of a country before he/she becomes a business person. He/She has, therefore, a responsibility to adhere to taxation requirements, just as he/she has the right to trade.
Good financial records aid a business to check on its trend.
‘’A good business should not look for ways to avoid paying taxes but should manage itself as to be able to settle taxes, ‘’ Mr. Godwin Aseka, a banker says.
The types of records you need to keep for accounting and tax purposes include sales, business expenses, income, credit card statements, bank statements, petty cash, annual tax returns, payroll, inventory, travel log, credit card sales receipts and invoices
Legal issues based records
This are meant to fulfill all the requirements set by the laws of a country. Any business must have a license of operation – in most cases renewable after a certain period of time. Trademark issues and permits are also to be well processed and kept in good records to avoid getting it rough with the law enforcers.
Other key records include employment applications for future use. This will have the details of all the persons who ever got interested in providing their services to your business or firm. Accessing them is made easier.
How to keep records
Question one is solved. The next careful consideration is how to keep records. Records can be kept in several general mechanisms. What informs the decision on how one wants to keep his/her records is the safety of one’s kept records and the business type.
Mr. Aseka classifys records in two major groups.
- Hard Copy
‘’This can be hand written or typed documents that are filed and stored as records. These may seem easy to prepare but are cumbersome especially when kept over a long period of time, ‘’the former Economics student at University of Nairobi says.
‘’Doing a reference to a past date, especially in a poorly organized business, is a taunting task since one if forced to peruse through so many papers before getting to what he/she wants, ‘’he adds.
Their safety is also a point of major discussion.
‘’This is the best method for small business and in the case of ignorance as far as the second method is concerned, ‘’ Aseka comments as far as this method is concerned. .
‘’There is software meant for keeping records. They range from simple ones as the Microsoft and the more complex ones as open office. They work best in an environment that has technical knowhow, ‘’ says the expert.
Keeping of such records is aided by the invention of the internet and this assures them their safety. Viruses pose a challenge to this mechanism.
Are you on the verge of starting a business? You are on the right track. But don’t ignore the need to keep good records. It is not just important but necessary.