Basic Elements of Record Keeping for SMEs in Nigeria

As a small business owner in Nigeria, you may have many responsibilities and challenges to deal with. One of them is keeping accurate and up-to-date records of your financial transactions and other relevant information. Record keeping is not only a legal requirement, but also a key factor for your business success. It can help you monitor your cash flow, track your performance, comply with tax laws, and make informed decisions.

However, record keeping can also be a daunting and tedious task, especially if you don’t have the right tools, skills, or knowledge. You may not know what records to keep, how to keep them, or how long to keep them. You may also face difficulties in accessing, organizing, or analyzing your records.

That’s why we created this blog post to help you understand the basic elements of record keeping for SMEs in Nigeria. We will cover the following topics:

  • What is record keeping and why is it important for SMEs in Nigeria?
  • What are the types of records that SMEs in Nigeria should keep?
  • What are the best practices for record-keeping for SMEs in Nigeria?
  • How can Fless help you with record keeping for SMEs in Nigeria?

What is record keeping and why is it important for SMEs in Nigeria?

Record keeping is the process of systematically recording, storing, protecting, communicating, retaining, and disposing of records that relate to your business activities. Records can be financial or non-financial, such as invoices, receipts, bank statements, tax returns, contracts, licenses, permits, inventory lists, employee records, customer records, etc.

Record keeping is important for SMEs in Nigeria for several reasons:

  • It helps you control your cash flow and manage your finances better. By keeping records of your income and expenses, you can see where your money is coming from and going. You can also plan your budget, forecast your revenue and costs, and optimize your profitability.
  • It helps you track your performance and evaluate your results. By keeping records of your sales, purchases, profits, losses, assets, liabilities, equity, and cash flow, you can measure how well your business is doing. You can also identify your strengths, weaknesses, opportunities, and threats, and take corrective actions if needed.
  • It helps you comply with tax laws and regulations. By keeping records of your transactions, you can calculate and pay your taxes accurately and on time. You can also avoid penalties, interests, or audits from the tax authorities. You can also claim deductions, credits, or refunds that you are entitled to.
  • It helps you make informed decisions and plan for the future. By keeping records of your data, you can analyze it and gain insights into your business operations, customers, markets, and competitors. You can also use it to support your decision-making process and plan your strategies and goals.

What are the types of records that SMEs in Nigeria should keep?

There are different types of records that SMEs in Nigeria should keep, depending on their nature,size,and industry. However,some of the common types of records that SMEs in Nigeria should keep are:

  • Accounting records: These are records that show the financial transactions and position of your business. They include invoices, receipts, bank statements, cash books, ledgers, journals, trial balances, financial statements, etc.
  • Tax records: These are records that show the tax obligations and payments of your business. They include tax returns, tax assessments, tax invoices, tax clearance certificates, withholding tax certificates, value-added tax (VAT) returns, etc.
  • Legal records: These are records that show the legal status and compliance of your business. They include business registration certificates, business name certificates, business permits or licenses, contracts or agreements, insurance policies or claims, court cases or judgments, etc.
  • Operational records: These are records that show the day-to-day activities and processes of your business. They include inventory lists or reports, sales orders or reports, purchase orders or reports, delivery notes or reports, production schedules or reports, quality control checks or reports, etc.
  • Human resource records: These are records that show the employment and management of your staff. They include employee contracts or letters of appointment.

Accurate record-keeping is essential for your business, fless can help you with your bookkeeping, book one on one demo with us.