Most of the small business persons in Bungoma town never keep records for their daily progress of their businesses. This is a shocking statistic bearing in mind the importance of keeping track of the daily, monthly and annual status of a business.
This realization came during our ‘Kata jasho’ radio program’s ‘ujasiriamali’ segment usually slated for Tuesdays. We (my co-host and I) carried out our own random sampling of business in Bungoma town with an aim to find out how of them had records prepared and if those who kept these records actually benefited from them or they just had them for a formality.
Mixed reactions on record keeping
“I keep records through the use of digital platforms through a certain software which I specifically bought for the purpose, because it is important in helping me to gauge if my business is growing, is stagnant or is declining,’’ our first interviewee a Mr. Isaac Makwara – an electronics businessman at the town centre told us.
“I then at the end of the day and month analyze my data to look for a way forward to improve on where I failed,” Makwara added.
Mrs. Ann Njoroge, a jewellery business lady also reiterated the importance of keeping records, a trade she has kept doing, as one that helps her track her progress.
But record keeping is not a common habit especially with the small scale businesses.
“Let me say the truth, I have never kept records,” Mr. Jeffrey Maina – a bookshop owner told us.
Out of curiosity we sort to know why.
“I don’t do it because I feel it is a little bit complicated especially with these price fluctuations. ” she said.
However, it is important to note that not keeping records can at times get very tiresome, a case example being Maina’s case – something he did not conceal from us.
This mixed revelation drove us to sort the knowledge of an expertise in the field of business management – Mr. Godwin Aseka who works with a leading bank in Bungoma town.
The University of Nairobi graduate in Economics, at the same time doubling up as a practicing businessman, clearly states that keeping records is something that a business aiming for success can never ignore.
“Record keeping is key for the success of any business, ‘’the youthful Aseka says.
“It is important for reference purposes, planning the way forward and self reflection and evaluation and at the same time streamlining a business towards your goals,’’ he adds.
Are there any chances of a business succeeding without keeping records?
Mr. Aseka agrees that it is possible but with very slight chances of success and to add to this he beefs it up with a rhetoric question.
“Honestly, how do you analyze the progress of a business without a record to show? ‘’ He poses.
Importance of keeping records in a business
Record keeping can never be ignored. No matter how you do it – be it by print mechanism (writing or printed) or through software, keeping records is important to any business as it is to the businessperson.
Why should one keep records – just because others are doing it or you have heard that it is important or are you aware as a businessperson –whether small or large scale –of these importance.
There are a number of reasons why keeping records is almost mandatory in a business and/or in any other form of entrepreneurship (agriculture inclusive).
They help one to monitor the progress of your business. Records can show whether your business is improving, which items are selling, or what changes you need to make. Good records can increase the likelihood of business success.
Preparation of financial statements is aided by records that are well kept.They include income (profit and loss) statements and balance sheets.
These statements can help you in dealing with your bank or creditors and help you manage your business. They also help one to keep track of their deductible expenses to avoid forgetting them.
A business has to always comply with the set rules and regulations as regards taxes. Records help one Prepare their tax return. These records must support the income, expenses, and credits you report. Generally, these are the same records you use to monitor your business and prepare your financial statement.
Records represent a wonderful organization of a business. It shows maturity and responsibility from the business person.
Start keeping them if you were not doing it. In the next edition, I will explore on the mechanisms to ensure good record keeping and what kind of records one should keep in a business.
Much more of this discussion on West FM 94.9/104.1’s Kata Jasho program every Tuesday 11.00am – 1.00pm.