NECA’s women business association trains on bookkeeping
Many small businesses have missed the opportunity to get credit financing or equity investment simply because the business books were not in order.
Business experts world over all agree that proper bookkeeping is essential for continued sustenance and expansion of a business because it is through this that tax officials, bankers, other investors or even the business managers can know the actual performance of a business.
Some businesses have crashed simply because the records of transactions were not well kept and so the managers did not see in good time the handwriting on the wall.
Therefore, women entrepreneurs association under the aegis of the Nigeria’s Employers Consultative Association (NECA) weekend had a one-day training to enlighten members and non-members on basic bookkeeping knowledge needed for business survival.
The trainers, members of this association called NECA Network of Entrepreneurial Women (NNEW) were Oluyemisi Situ, lead consultant, Cranial Resources Limited, and Oyeronke Lafihan of Rictor & Co.
Situ, highlighted accounting principles needed by Small and Medium Enterprises (SMEs), advising businesses to segregate duties for people in the handling of money, no matter how small the staff strength, as “it is not the same person that counts the money that comes in that should keep it and take it to the bank.”
She urged the business owner to comply with best practices guidelines laid down in the management of the company books.
Lafinhan explained the various books that should be kept by businesses – sales day book, purchases day book, main bank/cash book, journal register, trial balance and stock/bin card, and the functions of these books and how they are used.
The use of the Point of Sale (PoS) was also highlighted. Situ said: “If you have the PoS in place and it is well set up, some PoS machines have been enhanced to track inventories as well as sales. But you need to ensure that there is backup for the information on the PoS, either by putting them on the internet or printing out the reports regularly.”
Though the business owner need not be the one to keep all these records, the trainers said it was essential that the entrepreneur at least learn the basics.
The various taxation windows were x-rayed. These taxes include Value Added Tax (VAT), individual or Personal Income Tax, Capital Gains Tax, Withholding Tax, Company Income Tax, Education Tax and so on.
If the staff strength of a business is less than five, the owner and employees can walk in to the tax office do self-assessment to pay their personal income taxes, that is Pay As You Earn (PAYE), Situ said.
If staff strength is up to five or more, they have to pay as a group. “If you do not render your PAYE latest January 31, and you have five people, the tax man can fine you N500,000 if your business is a limited liability company and N50,000 if it is a business name,” she explained.
She said that “if the business is making losses and you are not able to pay the Company Income Tax, you can only have tax holiday for four years. But by the fifth year, the business is expected to start making profit and must start paying tax. Tax returns is based on audited account. For business name, you can do a statement yourself.”
Dele Alimi, director, membership and trade promotion, LCCI, also explained to the participants how their businesses could strategise to benefit from Nigeria’s 2014 budget.
By: OLUYINKA ALAWODE