Bookkeeping mainly refers to keeping of accounts and all
the information regarding the transactions and financial activities of a
business. Bookkeeping basically keeps track of the performance of ones
business. It should be a major practice to not only organize a business’
management but also prepare for the future. Record keeping helps analyze your business’ profitability
and the losses made. It can help you stay out of trouble with tax authorities, maintain
positive relationships with clients and vendors and also to legally protect
your business.
Certain records
are key to your business and hold importance to the smooth run of your
finances. For example, contracts. If your business provides a service, you should
sign a contract with your client every time you begin doing business with a new
person or company. If you provide a product, you may have contracts with
suppliers and distributors. And if you have employees or contractors, you’ll
definitely want to draw up work contracts. All this are records that would
prove important to of use to your company.
As for smaller businesses and individuals, you’ll usually
need to bring your own contract to the table. Before you open for business, you
should create a standard contract that lays out the basic areas you want to
cover in every business agreement, such as time frame, pay and job specifics.
Your contract may also cover issues such as confidentiality, records, liability and
ownership of work product. You will want to fashion the contract to each business
agreement you create, hence making business easier for you.
The other kinds
of records are client files. It’s important to keep a record of the work you’ve
done and the business agreements you’ve made in case you or the other party has
a question after the fact. Also, sometimes you can use past assignments and
agreements to inform future ones, saving you time. Client files are also a good
place to store notes about a client’s preferences or anything else unique to
that client that you want to remember.
Lastly the
other kinds of records are accounting and tax records. These are documents that
show the expenditure and earnings of the company. If your business has complicated financial records or if you
want to be able to prepare financial statements with
the click of a button, business accounting software such as Quick Books can be a
big help. Be warned, though, that to use business accounting software
accurately and effectively requires some accounting knowledge. If you don’t
know what debits, credits and journal entries are, this
software may just cause you headaches. You can always keep records by hand or
by spreadsheet. In many cases, spreadsheet software can serve all of your
accounting needs at least while your business is small.
Therefore, record keeping can save you from loss and high
credit debts and should be a new practice all Ugandans should take heed in for
the betterment of their businesses.
By Sheba Joy
Kyusa Intern
2018
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