IMPORTANCE OF DOCUMENTATION AS BUSINESS OWNER IN AFRICA

Record keeping is key to the growth of every business. It’s very important for every business owner to keep documents of various activities and business transactions which helps in business growth and helps in finding issues relating to the business.

Mostly business owners particularly traders in Africa pay little attention to documents used in business operations which sometimes affects the future of their business.

For the purpose of this article I would like to concentrate more on sales records, purchases receipt, receipt on expenses made and asset acquired, tenancy agreement and business documents. These documents help entrepreneurs to assess loans easier, helps them know whether the business is doing well or not and helps investors to identify the performance of a business and its stability.

SALES RECORDS
Its important for a business regardless of its size or product and services they render to keep records of the sales they make each day paying attention to products that makes much sales as this helps in investing more in such goods. Records keeping also helps identify the days or months with high sales which aids in planning especially when an equipment’s needs to be purchased or major expense is to be made.

In very organized businesses simple accounting software are used which makes its easier to tracking information. However, a simple business could start by recording in a notebook sale made in a day and profits generated at the end of the day or week.Sales records also helps in tracking receivables for traders who offer credit sales.

PURCHASES RECORDS
Most times business owners do not pay much attention to these receipts. Often entrepreneurs especially those in commerce do not take receipt after goods are purchased and even when they do, they discard them immediately. Some do not even care about the names on these invoices, they sometimes use names of a replacer or whoever they find at the time of delivery. This is a very important document especially when it comes to accessing a facility from a bank as it indicates how much or often goods are purchased .It also helps when a distributor or manufacturer wants to offer credit purchase and needs to know a traders purchasing power.

Most purchases records have records of payables and this helps a trader to know how much he/she needs to pay a supplier.

RECORDS OF EXPENSES
Its necessary for expenses to be documented whether its petty cash, salaries or utilities paid. It would be prudent for clients to documents all these expenses to calculate profit made in a month. Business owners must also ensure utility bills are paid in their names.Receipts of equipment’s purchased must also be kept for future reference

BANKING BUSINESS TRANSACTIONS
Small businesses in Africa particularly Ghana previously didn’t have access to traditional banks but with the introduction of micro finance and savings and loans these businesses can access banking transactions without much issues. For a business to manage its income and expenses effectively especially those offering services it would be prudent to have a business account which should be different from personal accounts where business transactions could be traced. Sales must be deposited in these accounts and expenses and even purchases paid from these accounts. Keeping a proper account helps in accessing a visa for purchase outside the country.

TENANCY AGREEMENT
Most businesses operates from rented facilities and usually most traders do not care about documentations, once payments is made business commences and this places doubts on its stability .Its necessary for agreement to be documented whether for rental or purchase of space / store which helps any business when acquiring a loan facility.

Most businesses particularly micro are not good with records and this affects business growth. These records must be properly kept as its used to ascertain business strength and weakness and its stability.