July 16, 2020 - BY Admin

WHY IS ACCOUNTING NECESSARY FOR SMALL AND MICRO BUSINESSES, ESPECIALLY THE INFORMAL SECTOR?


WHY IS ACCOUNTING NECESSARY FOR A SMALL BUSINESS, AND HOW IS IT DONE? THE ANSWER TO THE FIRST PART OF THIS QUESTION YOU WILL SEE WHEN YOU ASK YOUR BANK FOR A LOAN. ON THE OTHER HAND, EVEN IF YOU ASK A RELATIVE FOR THE MONEY, THE PERSON WILL BE EAGER TO KNOW WHETHER HE/SHE WILL GET THE MONEY BACK.

SO, WHEN YOU ASK FOR MONEY FROM ANYWHERE – ESPECIALLY FOR A BUSINESS – PEOPLE WILL ASK YOU WHETHER YOU MAKE PROFIT. EVEN FOR YOU IT IS BETTER TO KNOW WHETHER YOUR BUSINESS IS PROFITABLE. IF NOT, YOU WILL EAT INTO YOUR CAPITAL – AND YOUR BUSINESS WILL COLLAPSE. UNFORTUNATELY, THIS SCENARIO WILL THEN SURELY HAPPEN SOONER THAN LATER. (FOR BUSINESS STARTER, IT IS EVEN BETTER, IF YOU HAVE A SECOND SOURCE OF INCOME. AT THE BEGINNING, YOU CAN’T RELY ON YOUR BUSINESS MAKING ENOUGH PROFIT TO LIVE ON.)

 IT IS ESPECIALLY NECESSARY FOR YOU TO HAVE A RELIABLE ACCOUNTING. INORDER TO MAKE YOUR BUSINESS SUCCESSFUL, YOU MUST HAVE AN OVERVIEW HOW THE BUSINESS DEVELOPS, AND WHERE THERE ARE WEAK AREAS IN YOUR BUSINESS.

SO, HOW WILL YOU DO YOUR ACCOUNTING? YOU DO NOT NEED TO MAKE IT VERY COMPLICATED. NOBODY WILL ASK YOU – AT THE BEGINNING – TO DO SOMETHING LIKE DOUBLE-ENTRY ACCOUNTING, ETC. OF COURSE, IF/WHEN YOUR BUSINESS BECOMES SUCCESSFUL, THIS WILL CHANGE IN THE FUTURE.

FOR NOW, A SIMPLE PLUS-MINUS CALCULATION WILL BE SUFFICIENT. THAT MEANS, YOU HAVE THREE COLUMNS. ONE IS FOR THE DATE,ONE FOR THE INCOME, AND ONE FOR THE EXPENSES. IN THE LEFT COLUMN, YOU WRITE THE DATE. IN THE MIDDLE COLUMN, YOU NOTE THE MONEY YOU RECEIVED, AND FOR WHAT YOU RECEIVED IT. IN THE RIGHT COLUMN, YOU WRITE HOW MUCH MONEY YOU SPENT, AND FOR WHAT YOU SPENT IT. AT THE END OF EVERY MONTH – OR PERHAPS EVERY WEEK – YOU SUM UP WHAT YOU RECEIVED AND WHAT YOU SPENT. READY IS YOU BOOKKEEPING FOR A MONTH.

NOW, FOLLOWING IS A BRIEF EXAMPLE FOR WHAT I JUST WROTE. LET US GUESS YOU SELL SECOND-HAND CLOTHES AND BAGS.:

DATE                                   INCOME                                EXPENSES
1.                                     20 (SALES OF 1 T-SHIRT)
5.                                                                                            15 (ELECTRICITY)
7.                                    50 (SALES OF 2 BAGS)
9.                                                                                           35 (RENT)
11.                                   15 (SALES OF 1 TROUSER)
15.                                  25 (SALES OF 1 BLOUSE)
23.                                 20 (SALES OF 1 T-SHIRT)
30.                                                                                         25 (SALARY)
TOTAL THIS MONTH 130                                            75
INCOME MINUS EXPENSE 130-75=55

THAT MEANS, IN THE RECORDED MONTH, YOU MADE A PROFIT OF 55.
GOOD JOB!

SO, THAT'S  WHY ACCOUNTING IS NECESSARY FOR A SMALL BUSINESS

FROM 1ST OF JUNE, 2020 ON, YOU CAN DO YOUR BOOKKEEPING THROUGH RECKLING ENTERPRISE. THIS WILL BE FREE OF CHARGE FOR MICRO BUSINESSES WITH A WORKING CAPITAL OF UP TO 5,000 GHC.

JUST GO TO https://www.recklingenterprise.com AND CLICK ON "SERVICES". THERE, YOU CLICK ON "BUSINESS MANAGEMENT" AND FILL THE FORM. THERE, YOU CAN REQUEST THAT WE SHOULD DO THE BOOKKEEPING FOR YOUR BUSINESS. WE WILL THEN REPLY TO YOU WITHIN 24 HOURS FOR MORE INFORMATION ABOUT YOUR BUSINESS. RECKLIMG ENTERPRISE HAS INSTALLED AN ACCOUNTING SOFTWARE WITH WHICH IT IS VERY EASY TO EATABKUSH A SIMPLE INCOME/EXPENSES ACCOUNTING FOR YOUR BUSINESS, EVEN IN THE INFORMAL SECTOR

UNTIL 1ST OF JUNE, 2020, YOU CAN STILL REACH US WITH YOUR REQUESTS THROUGH https://www.ghanaresearch.org

WE'D LOVE TO HEAR FROM YOU!