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Record keeping for small businesses

By Emeka Anaeto

Good business record-keeping lets you prepare financial statements of your company, one of the key ingredients of a good business that has a future. It helps you keep tabs on your expenses, and comes in handy if you ever need to seek a business loan from any bank.

For starters in this topic you should hold to heart this eight small business record keeping rules: Always keep receipts, bank statements, invoices, payroll records, and any other documentary evidence that supports an item of income, deduction, or credit shown on your business transactions; Expenses that are less than N1000 or that have to do with transportation, lodging or meal expenses might not have a receipt.

But you still need to put them in your expense record showing where and when the expense occurred, and what it was for.

With the tax regime in Nigeria becoming very aggressive and compelling these records need to be kept for at least three years

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In view of the challenges of keeping documents it is advised that you go paperless, store everything electronically, and always make backups. With this system the records can be kept for many years, indeed through the life of the business.

Even if you don’t need a document to do your taxes, you might need it for something else. When it doubt, keep it.

Here are the main types of records you should hang on to: Receipts, Cash register tapes, Deposit information (cash and credit sales), Invoices, Proof of payment/electronic funds transferred, Credit card receipts, Bank statements and Petty cash slips for small cash payments.

Others include, accounts payable and receivable, Payroll records (both for regular employees and casual labourers, Tax papers, any other documentary evidence that supports any money transactions.

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