Basic Book keeping and Accounting
Aside the requirements under the Companies Act, 2019 (Act 992) for companies to keep proper books of account, this practice is essential for any business in order to become successful.
In order to grow and be able to contribute meaningfully to the Ghanaian economy, SMEs must be able to attract and secure capital for their business. Providers of capital more often than not, rely on financial information before making a decision to either invest or not to invest in a given business.
Keeping proper books of account and generating periodic accounting reports will provide information to the owners of the business as to whether or not the business is performing in line with expectation. It forms the basis for devising strategic means of improving on the performance of the business. Given the numerous benefits derived from book keeping and accounting in terms of compliance and business performance, SMEs are advised to keep the following books for their operations:
- Cash book;
- Sales day books;
- Purchasing day book;
- Inventory journals (return inwards/return outwards journals);
- General journals; and
- Supporting accounting documents such as invoices, purchase vouchers, cash receipts, bank statements and any other documents relevant for the accounting function
These books of accounts need to be audited on an annual basis by external auditors. Audited financial statements provide a true and fair view of the financial affairs of the business