Record keeping for a small business

RECORD KEEPING FOR A SMALL

BUSINESSBY DJEUMO EUGENE CYRILLE

& EBANE KOKE ROSETTE

1:30 minutes

QUOTE

<< FAILING TO PLAN IS PLANNING TO FAIL >>

IntroductionBy taking this training, you are taking an important step towards building a better business.

Record keeping important for smallbusinesses

• Sole proprietor

• Partnership

• Corporation

Objectives

• What record keeping is and how it’s important

• Record keeping basics –practices, rules, and tools

• Which records to keep –tracking, planning, legal, and taxes

• Benefits of record keeping

• Business software available for record keeping

• Business software training

Pre - Evaluation

1. Which of the following are reasons for keeping good records? Select all that applies.

a. Business deal tracking

b. Planning

c. Legal compliance

d. Tax preparation

2. When creating a record keeping system, It’s a good idea to____________________________________

a. Wait until enough information is available to get started.

b. Start simple and refine later.

c. Evaluate your business need.

d. Start after one year of operation.

3. Which of the following should be done before purchasing business software?

a. Create an information technology (IT) department.

b. Get a business credit card

c. Evaluate your business needs

d. Consult with the Internal Revenue Service (IRS)

4. Which of the following are records keeping tools.

a. Manila folder

b. Computer System

c. File hosting system

d. None of the above

e. All of the above

5. For which type of small business is records keeping a good practice?.

a. Sole proprietor

b. Partnership

c. Corporation

d. None of the above

e. All of the above

6. Record keeping is the orderly and __________ practice of storing business records.

a. Corprate

b. Legal

c. Financial

d. disciplined

Definition

Record keeping refers to the orderly and disciplined practice of storing business records.

Reasons for keeping good Records

• Detail tracking

• Planning

• Legal compliance

• Tax preparation (State & Local)

Detail Tracking

Customers, sales and inventory are very significant for a startup business owner.

You risk disappointing a customer if you do not keep their names and contacts. This means loosing the customer forever.

Staying inform of customers, their orders, and the inventory to provide for their purchases is challenging.

Planning

Proper records Keeping helps to plan your business future. It helps to determined the business inventory needs for the next three months in order to anticipate seasonal cycles such as in clothes business.

Legal ComplianceAs a business owner, you will be required to hold various contracts license and permit. To maintain and reports employees payrolls for tax Purposes. Three category of legal compliance include:

• Contracts, leases, and other agreements (Such as copy

right)

• Licenses, insurance and permits

• Payroll and personnel

A well kept record system ensures that you are able to keep up with tax reporting requirement. You may like to refer back to contractual obligations from the original signed copies.

Exercise #1 : Business record Keeping

• What records do you need to keep?

• What area of records keeping needs your attention?.

Record Retention

Business owners should know how long these records have to be kept.

Good records retention is at the interest of the company.

A poor records retention system also poses security risk .

Record Retention

Examples (Years)

Sample Record Retention schedule

Accounting and Fiscal ( Invoices, receivable, checks and payables:

5yrs. Auditors reports and annual Statement: permanent. Inventory: 4yrs)

Personnel (Payroll:6yrs. Contracts and insurance records: 5yrs.

personnel file and timecards: 3yrs. Retirements plans: permanent)

Business and Corporate (Contracts and leases: 7yrs, correspondants:3yrs. copyright, property records: permanent. sales record, customers records: specific to business. license, permit and insurance

policy: as required )

Taxation (Employees withholding: 7yrs. Tax returns, Tax bills and

statements, none employees compensations: permanent)

Common Records Keeping Tools

Start your business with a simple record keeping system and expand to accommodate more records and increasing complexity as your business grows. Some of these tools include:

Common Records Keeping Tools

A. Paper Base

B. Tickler

C. Computer system

D. Cloud Computing

E. CLoud Accounting

A

D

E BC

Business Software

• Evaluate business needs

•Many software products available• Spreadsheets• Email• Accounting

Business SoftwareDo research to buy software that matches your business type and size. Consider factors such as:

• Point of sales system integration

• Inventory tracking

• Online options

• Manufacturing base options

• E- commerce base option

• Industry specialization options

• Multiple users

Characteristics of software's options

• Inventory: It requires software's programs that will track inventory purchases and sales. Study the capacity to see if it will meet your needs now and in the future.

• Online Sales : using internet site like ebay, be sure to investigate if your software will work with your system for online sales.

• Manufacturing: Investigate to see if your software will work with your manufacturing processes.

• Specialized: some business have unique needs, for this reason requires industry specific software. Software's can be customized to fit a business unique situation. This kind usually cost more and requires specialized training.

Three common Software's Options• Email (many email services provides a webmail client as part of their

internet service package)

• Spreadsheet (Is use to track information about client, it is a computer application that stimulate an a paper accounting worksheet, it is frequently use for projections.)

• Accounting software (it keeps tracks of business financial records such as sales, expenses, inventory, and assets.it helps to execute, manage and track critical financial transactions and related to financial activities. It duplicates the function of a manual system but reduces human errors. When purchasing an accounting take note on: memory volume, inventory sophistication, mobile function, industry specific

reports.)

Exercise #2: Your Accounting System

• Take some time to think about your accounting system.

• How might your accounting system be improved?

Business Software TrainingWhen you choose a business software be sure to be train in it use. Training will make you more efficient and effective in the use of the software to serve time and money. Take advantage of training options such as tutorials, free trials, or online training. Here are some of the examples

Business Software Training• Type the name of the software you are using alongside

training on a browser and choose the most reliable. Some are free.

• Youtube

• Community college

• Score

• Small Business development Centers

• Women Business Centers

• Veterans Business Outreach Centers

• US Export Assistance Centers

• Bookkeepers and consultants

Top Three Key Points to Remember• As a small business owner you will to track a

significant amount of information, no matter the type, size, or complexity of your business, established and maintain a paper record keeping system suitable to your business needs.

• Regardless of whether you use a computer system, cloud – based computing or a combination of these two, you will need to think about business software products to help you keep records for your business. E.g. emails, spreadsheet and accounting

• Pick one record keeping system or use a combination – but start now.

Now

Refine as business grows

Start now with something that works

Further Information

• Federal Deposit Insurance Corporation (FDIC)

• US Small Business Administration (SBA)

• US Financial Literacy and Education Commission.

ConclusionYou learned about:

• What record keeping is and how it’s important

• Record keeping basics – practices, rules, and tools

• Which records to keep – tracking, planning, legal, and taxes

• Benefits of record keeping

• Business software available for record keeping

• Business software training

Summary

• What final questions do you have?

• What have you learned?

• How would you evaluate the training?

Post Test

1. It is important to establish and _________ your record keeping system.

a. Justify

b. Certify

c. Maintain

d. Discuss

2. Besides being legally required for some information, there are additional reasons for keeping good records.a. Trueb. False

3. How would you characterized a simple a simple paper file folder as a record keeping tool?a. Simple but worthless particularly for a start

–up business.

b. Good but a computer system is better in all cases, as long as it is affordable.

c. Good, but is better to start the process of records keeping with cloud computing.

d. Simple, but fine for a start up business

4. Which of the following are factors to consider when purchasing accounting software's? Selects all that applya. Reduced errors

b. Better organization

c. Faster calculation

d. None of the Above

5. Generally, it is best to kept all records for exactly 8 years?a. True

b. False

6. A(n) ___________________ is commonly used to track information about clients such as inventory, sales and employees timecards.a. Email programsb. Spreadsheetc. File hosting systemd. Payroll system

7. For a new business, what timeframe is appropriate for starting a record system?a. Now ( or as soon as possible)b. Within two quarter of the start – upc. Within the first yeard. Before the first task filing is due.

THANK YOU676342030

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What Do You Know? Record Keeping for a Small Business Instructor: ______________ Date: ____________________ This form will allow you and your instructors to see what you know about record keeping, both before and after the training. Please read each statement below. Circle the number that shows how much you agree with each statement.