Do you know which business records to keep, and why?
Maintaining good records is essential for every business.
And keeping those records is a legal requirement that, depending on your jurisdiction, you will be obliged to do for a specified period of time.
But you shouldn’t just maintain records to meet legal requirements. Having accurate records can also help you do the following:
✓ Prepare your financial statements for decision making and accountability;
✓ File and pay your taxes;
✓ Comply with various regulations
Records to keep
There are many different types of records that you are required to keep, and these vary based on your location, business type, and industry.
However, there are basic or general records required by every business, and these include:
❖ Business and Legal records – These are the records which give you the legal authority to operate. Such records include:
✓ Business Incorporation / Registration certificate
✓ Certificate to Commence Business
✓ Business Operating Permits / Licenses, etc.
❖ Business Agreements – These records include contracts between your business and the following:
✓ Suppliers / Vendors
✓ Customers / Clients
✓ Contract Staff, etc.
❖ Financial records – These records reflect your daily financial transactions, such as:
✓ Purchases / Payments
✓ Sales / Receipts
✓ Payables ✓Receivables
✓ Salaries, etc.
❖ Tax and Pensions records – These records reflect your tax position with the Revenue Authority such as:
✓ Tax registration certificate (this provides your TIN (tax identification number))
✓ Pension registration certificate (this provide details of your firm pension number and office)
✓ Tax Assessments from the Revenue Authority
✓ Correspondence with the Revenue Authority
✓ Receipts and Schedules for taxes paid
✓ Receipts and Schedules for social security/pensions paid
❖ Business Information and Executive Decisions – These are the records that inform users about the nature of your business, how operations are managed, and how business decisions are made. Such records include:
✓ Company Profile
✓ Organizational Chart / Organogram
✓ Company Processes, Policies and Procedures
✓ Minutes of Board Meetings, etc.
Which records will your accountant require?
Many organizations and business owners will always assume their accountant requires only the financial records to prepare their financial statements. This assumption is incorrect. Yes, your accountant will require financial records, but they will also require all the above listed records.
Why will the accountant require all of the above records?
Your accountant will require these to:
✓ Understand your business
✓ Understand the legal and regulatory obligations of your business
✓ Translate the operational transactions
✓ Ensure there is adequate evidence to support transactions
✓ Analyze your financial statements and provide you with advisory services
Detailed list of information required by your accountant
The list below represents the basic information your accountant will require from you for the preparation of your financial statements.
o Business Registration Certificates (Incorporation and Commencement)
o Company Regulations / Articles
o Company Profile (A brief write-up on your company)
o Business Processes, Policies and Procedures
o Organogram / Organizational Chart
o Accounting Policies and Procedures
o Financial Year End
o Customer Service Agreements
o Supplier / Vendor Agreements
o Any Other Business Agreement
o Bank Statements
o Customer & Supplier Invoices
o Payments to Suppliers / Vendors (cheque stubs / copies of cheques, bank transfer notice / advice, receipts)
o Payments received from Customers (Copies of cheques, transfer advice, bank deposit slips, receipts)
o Petty cash
o Payroll reports
o Tax returns (VAT, PAYE, Withholding tax, Prepaid tax and Annual tax)
o Social Security / Pensions receipts and schedules
If you’re unsure about which documents to keep, consult your Accountant.
Prepared by Mercy Badu.
Mercy is Finance Manager of SCG. She works with internal and external clients to improve accounting and financial management.