Why you need record-keeping in your business

If you're a businessman or businesswoman or maybe, you're a potential businessman or lady, please, am here to let you know of the importance of record-keeping. Before the end of this article, you'll be able to either buy a jota or a computer for your business record-keeping. Let's peers deep into the topic.

What is record-keeping?

Record-keeping is a way of writing down all the money your business generated, cash out, and debt (both the one you're owing people and the one you're owing other people)

There are 2 different methods of record-keeping and they are:

• Manual recording

And

• Machine recording

Manual recording is the process of recording all your business transactions including all the above mentioned record-keepings with pen and paper. Now, let's check it's advantage and disadvantage.

Advantage:

(1) Free access: It's accessible without power supply. Yes, even if there is electric power outage, you can easily check on them.

(2) Debtors can easily sign their debt.

Disadvantage

• Easy to loss

• Keeps office dirty

• Easy to forget

-etc

Machine recording is the way of keeping business records well stored in your gadget memory. You can easily do so either with Laptop or computer. Let's check on it's advantage and disadvantage.

Advantage

(1)Fast access: with computer, you can easily access all your business transactions and many more.

(2)Reliable

(3)Simple. etc

Disadvantage

(2)Easy to delete

(2) Can't work without power supply. etc

Having see what record-keeping is and types of record-keeping, let's check on the why you should have a record-keeping.

Why keep records?

There are various benefits of record-keeping in a business. Below are some of them:.

• It shows how far your business have gone and how it's doing.

• Record-keeping helps you to have a future business plan and how to achieve it

• As imperfect, we humans can easily forget the people owing us(our debtors) as well as our creditors.

• With record-keeping, one can easily cross-check or evaluate his past business records, so as to check the contrast with the present. With that, the person can easily plan wisely for the future.

• It helps one to easily manage and take control of his business capital and asset

• With record-keeping, one can easily detect problems that will affect his business in the future before it's too late.

• With record-keeping, you can easily detect and know when you or another person is misusing your money.

• Record-keeping helps one to know when the demand in a product is high and when it's low.

• With record-keeping, you can easily avoid quarrelling with your customers as the record will do justice to that.

Having seen various benefits of record-keeping, the next question is:

Does it have any requirement?

Yes is the answer. Just as every other aspect of a business have it's requirements, record-keeping have at least 4 characteristics or requirements. Check them below:

• Simplicity: Record-keeping must be simple to use whether manual or machine

• Understandable: It should be easy to understand both by you an other people including your sales boys and girls and maybe, apprentice too.

• Accurate: It's accuracy should be 100%. Avoid deviousness.

• Updated: Always remove irrelevant sheets from your manual record-keeping and same time delete irrelevant records from your machine record-keeping.

I know that at this point, you may be wondering the basic things to record in a business especially if your just starting or a novice. Please calm down, am here to help you know and identify those basic things you need to record. Let's goo...

Basic record-keeping tips

• All your purchases

• Your sales

• Your business cash receipts

• All your business cash disbursement

• All business equipment record

• Your business inventory record

• Debtors and creditors

As we have seen all the basic record-keeping tips, let's review them one-by-one so as to benefit wisely.

• All your purchases:* Without keeping accurate records of all your purchases, you may not be able to detect when the price is high and when it's falling. Meaning that you can either sale costly or beyond market price which either results in loss of customers or loss of capital. If you're already into business, you'll believe with me that most times, one can easily forget the recent price of goods in your shop. But, with purchase recordings, you can easily contact the purchase price so as to know the exact recent price.

All your sales: If you're keeping sales record, it will help you to identify the goods that is going down so as to replace them. Infact, it will help you and your business to be up to date.

Your business cash receipts: Most times, some devious customers may claim to have balance up their debt. But with such record, I promise you, such individuals would be hitting their hand in a stone. Yes, the secret beyond this

record is Signature. Make sure any cash receipt record must contain the signature of both the purchaser and the seller to avoid future disagreement.

All your business cash disbursement: This aspect is more than important especially if you're managing the business with someone or, maybe, you have sales boys and girls.

All business equipment record: If you should buy it purchase any equipment for your business, it will be wise to keep a record of it. Why? it will help you know how and when you have regained the amount you spent buying it.**

Your business inventory record: This is another relevant record. This is a list where you write down or make list of all the items in your business or shop. Here, you can also write down some potential products you need to add to boost your business the more.*

Debtors record: This set of people can argue from morning till night though their faulty, they will keep on dragging from morning to night just for you to cleanse their debt. But, with this record, they're inexcusable from their debt.

Finally...

Creditors record: This type of record takes place if you're a creditor. A creditor is someone who lends money to individuals or businesses most times, with collateral. Therefore, if you should lend money to any individual, make sure to record it.

Conclusion

This is where am drawing the curtain for now. Please bear in mind that business is something you shouldn't rush into without proper guidance. Believe me, if you should read this article from beginning to it's finishing line, you must understand why record-keeping is vital in every successful business. On my next publication regarding business, expect important informations about bookkeeping in a business. Wait patiently for me. I will soon be back.

Byeee.