{"id":36263,"date":"2023-07-10T15:29:18","date_gmt":"2023-07-10T15:29:18","guid":{"rendered":"https:\/\/swoopfunding.com\/na\/?post_type=blog&#038;p=36263"},"modified":"2025-08-11T10:37:26","modified_gmt":"2025-08-11T10:37:26","slug":"small-business-bookkeeping-the-complete-guide","status":"publish","type":"blog","link":"https:\/\/swoopfunding.com\/na\/blog\/small-business-bookkeeping-the-complete-guide\/","title":{"rendered":"Small business bookkeeping: The complete guide"},"content":{"rendered":"<div class=\"aivoov-player-block\">\n\t<div class=\"read_this\">Read this article to me<\/div>\n\t\t\t<style>\n\t\t\t.plyr__controls .plyr__controls__item:first-child{\n\t\t\t\tbackground:#2e9c8e !important;\n\t\t\t}\n\t\t\t:root{\n\t\t\t--plyr-color-main:#2e9c8e;\n\t\t\t--plyr-audio-controls-background:#f0f2f4;\n\t\t\t--plyr-audio-control-color:#546a7b;\n\t\t\t}\n\t\t\t[data-plyr=\"mute\"]{color:#2e9c8e !important}\n\t\t\t.aivoov-text-color{color:#546a7b}\n\t\t<\/style> \n\t\t<div class=\"audio_player\">\n\t\t<audio class=\"js-player\" controls=\"\">\n\t\t\t<source src=\"https:\/\/monky-voice-over.s3.amazonaws.com\/aivoov\/781640cc-7bc1-4bbf-9492-22dedc19678b\/fd4a644d-ad56-4412-93b1-11b2f12df901.mp3\" type=\"audio\/mp3\">\n\t\t\t<source src=\"https:\/\/monky-voice-over.s3.amazonaws.com\/aivoov\/781640cc-7bc1-4bbf-9492-22dedc19678b\/fd4a644d-ad56-4412-93b1-11b2f12df901.mp3\" type=\"audio\/ogg\" \/>\n\t\t<\/audio> \n\t\t\t\t <div class=\"powerd_by aivoov-text-color\"><p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/aivoov.com\/?um_source=plugin_powered_by\" style=\"color: inherit;\">Powered by AiVOOV<\/a><\/p><\/div>\n\t\t \n\t\t<\/div>\n\t\t<\/div>\n\n\n\n<p><span style=\"font-weight: 400;\">A business without bookkeeping is a business risking failure. Bookkeeping builds the financial records that are essential for success, provides order and structure to business performance, and gives business owners and managers clear sight of how well their business is working.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>What is bookkeeping?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Bookkeeping is a vital role for the smooth functioning of a small business. It involves the day-to-day <\/span><span style=\"font-weight: 400;\">recording and reporting of an organisation\u2019s financial information, and it is different to accounting, which is the process of using the business\u2019 data to establish its financial position and make decisions about how the finances are managed.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Bookkeeping involves a variety of activities, including:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\">Keeping sales and purchase ledgers to track income and expenses<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Monitoring cashflow<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Making payments to suppliers&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Chasing payments from customers<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Ensuring the business&nbsp;pays its taxes on time and pays the correct amount due&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Claiming tax back against business expenses<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Managing staff payroll and paying and reporting PAYE&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><b>Why do small businesses need to do bookkeeping?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Bookkeeping is necessary for these important reasons:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\">It allows the business to keep on top of money owed to suppliers and from customers,&nbsp; understand its cash position and <\/span><a href=\"https:\/\/swoopfunding.com\/na\/business-loans\/working-capital-loans\/\"><span style=\"font-weight: 400;\">cashflow<\/span><\/a><span style=\"font-weight: 400;\">, and to measure its financial performance.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">It ensures the business does not fall foul of late charges or penalties or miss other mandatory expenses, such as business rates.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">It gives the business the records and information it will need to secure <\/span><a href=\"https:\/\/swoopfunding.com\/na\/business-loans\/small-business-loans\/\"><span style=\"font-weight: 400;\">loans<\/span><\/a><span style=\"font-weight: 400;\"> and credit from banks and suppliers, or <\/span><a href=\"https:\/\/swoopfunding.com\/na\/business-grants\/\"><span style=\"font-weight: 400;\">grants<\/span><\/a><span style=\"font-weight: 400;\"> from public sources.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">It allows the business to plan properly. If you don\u2019t know where you stand financially, how can you make the big decisions that will determine the long-term success of your business?<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">It gives your business the information it needs to hire more staff, <\/span><a href=\"https:\/\/swoopfunding.com\/na\/business-loans\/asset-finance\/\"><span style=\"font-weight: 400;\">accrue assets<\/span><\/a><span style=\"font-weight: 400;\">, acquire other businesses, even <\/span><a href=\"https:\/\/swoopfunding.com\/na\/commercial-mortgages\/\"><span style=\"font-weight: 400;\">buy property<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">It provides the essential data that your business needs to grow.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><b>How to do bookkeeping:<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Many small business owners will initially conduct their own bookkeeping, but as their business expands, they may find their time is better spent elsewhere and they will hire a bookkeeper or use an external service to maintain financial records. However, no matter who does the bookkeeping, the first step is to decide what type of accounting method to use: T<\/span><span style=\"font-weight: 400;\">raditional accounting records income and expenses at the date of the sales or purchase invoice. <\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Cash accounting records income and expenses on the date when you actually receive or pay the money. Cash accounting reduces the risk of having to pay tax on money you haven\u2019t received yet, but it is only available if your business revenue is N$83,000 or less.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Once you\u2019ve settled on your accounting method, follow these key steps:<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><b>Record everything<\/b><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Bookkeeping tracks the finances using these types of records (also known as \u2018books\u2019 or \u2018ledgers\u2019):<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\"><strong>Cashbook<\/strong> \u2013 records everything moving in and out of your account \u2013 reveals your cashflow.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>Sales ledger<\/strong> \u2013 records everything you\u2019ve sold and shows paid and unpaid customer invoices. (Unpaid sales invoices are known as your \u2018accounts receivable\u2019 \u2013 because you are waiting to receive them).<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>Purchase ledger<\/strong> \u2013 records what you\u2019ve bought, when and how you paid for it, and what invoices from suppliers you have still to pay. (Unpaid bills are known as your \u2018accounts payable\u2019 \u2013 because you haven\u2019t paid them yet).<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">Small businesses may have other records books, but these are the minimum you will need to get started. <\/span><span style=\"font-weight: 400;\">Use your books to track every sale and payment and make it clear when the transactions were made or received so you can easily find them to compile end of year statements, chase clients or suppliers, or share your finances for an audit or bank inspection.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><b>Reconcile transactions<\/b><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Transaction reconciliation means cross-referencing your business books against your bank statements to check that your transactions and bank balances match \u2013 and identifying the reasons if they don\u2019t.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Transaction reconciliation also means allocating expenses to projects or sales you are in the process of completing \u2013 for example, if you were carrying out a plumbing repair where you bought spare parts and piping, the cost of those materials will need to be reconciled against the job so that you charge the customer the correct amount.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Transaction reconciliation can be carried out daily, weekly, monthly, or less often, depending on the number of transactions you make. However, you will be required to reconcile your books before submitting tax returns at the very least.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><b>Monitor cash flow<\/b><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">More small businesses go bust because of poor cashflow than any other reason. Cashflow is the measure of the money in and money out of your business. In an ideal world, you want funds coming in faster than they go out so that you always have a strong cash buffer against unexpected costs or downturns. However, for many small businesses, the difference between money in and money out is often very tight, so it is important for you or your bookkeeper to carefully monitor cashflow. Use forecasts (estimates) to project future sales and expenses, so that you can spot issues, (such as a cash shortfall), long before you get to them. (If you can see a problem with cashflow looming, you may want to consider an early application for a <\/span><a href=\"https:\/\/swoopfunding.com\/na\/business-loans\/working-capital-loans\/\"><span style=\"font-weight: 400;\">working capital loan<\/span><\/a><span style=\"font-weight: 400;\"> to tide your business over).<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><b>Watch out for late payments<\/b><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Customers who pay late can cause major problems for your business \u2013 hurting cashflow, limiting your ability to grow, eve affecting how much you can pay yourself. Part of the bookkeeper\u2019s role is to keep track of late payers, and when necessary, chase the customer for payment.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><b>Paying taxes<\/b><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Running a successful business means getting paid on time and paying your suppliers on time. The taxman can be harsh on businesses who do not pay their taxes when they are due, and the interest and mounting penalties they apply can sometimes tip a small business into bankruptcy. Ensuring you pay your taxes is therefore crucial to long-term growth, and it is part of the bookkeeper\u2019s responsibility.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">(Many small businesses struggle with paying their VAT when it is due, and it can be especially difficult for organisations who must wait 60, 90, or more days for payment. However, smart businesses make sure they pay their VAT on time, regardless of their cashflow situation, by using a short-term <\/span><span style=\"font-weight: 400;\">VAT loan<\/span><span style=\"font-weight: 400;\"> to cover the payment).<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><b>Other small business bookkeeping duties<\/b><\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">On&nbsp; top of the tasks described above, and as well as issuing invoices, paying suppliers, and managing payroll, bookkeepers may also p<\/span><span style=\"font-weight: 400;\">rovide other services, such as helping with financial reports (profit-and-loss, balance sheet, cash flow report), and measuring business performance.<\/span><span style=\"font-weight: 400;\">&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>How software can help<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">A small business\u2019 books have to be recorded somewhere. They could be kept using pen and paper, but that\u2019s not efficient in the digital age. Using software, even if it\u2019s only basic Excel spreadsheets, can significantly improve the accuracy of your books, and also give you access to a wide array of tools, apps, and services that old school manual ledgers cannot provide.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Use software to:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\">Pull transaction data direct from point-of-sale (POS) systems, invoicing software, and banks<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Speed up transaction reconciliation<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Automatically pay bills<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Send automated invoice reminders to customers who owe you money<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Tell you when sales invoices have been paid<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Let you to check your cashflow from your phone<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">Small businesses that are considering investing in purpose-built accounting software should ask their accountants which programme is best for them, and if it will integrate with the systems the accountants use to generate the business\u2019 end of year tax returns.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>Why do some small businesses outsource bookkeeping<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">In short, to maximise their productivity. In many cases, a small business\u2019 books are maintained by the business owner, but, when you consider the owner\u2019s value to the business, this may not be the most productive use of their time. Instead, it may make better financial sense to hire a bookkeeper, or outsource the bookkeeping to a dedicated service, than for the senior management to spend their time recording every transaction. In other cases, the business owners may not have the skills required to manage the books, so employing a bookkeeper or outsourcing the role is the only sound solution.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>Which option is right for me?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">It depends on your situation. If your business is very small, or very new, it may make more sense for you to initially manage the books if you have the skills to do so, as this will reduce your overall expenses. However, if your business is growing and your time is too valuable to spend logging every transaction, or if you don\u2019t have the necessary skills to manage the books, then hiring a bookkeeper or outsourcing to a service is probably a better way to go.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>How Swoop can help<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Managing the books of a small business can be difficult or time consuming at the best of times, doing so when finances are tight can be even worse. Swoop understands the daily financial challenges that many Namibian SMEs face, and we have the best solutions for those problems. Register with Swoop today to access our full range of funding options. From <\/span><a href=\"https:\/\/swoopfunding.com\/na\/commercial-mortgages\/\"><span style=\"font-weight: 400;\">commercial mortgages<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><span style=\"font-weight: 400;\">unsecured loans<\/span><span style=\"font-weight: 400;\">, to business <\/span><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/business-credit-card\/\"><span style=\"font-weight: 400;\">credit cards<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/startup-loan\/\"><span style=\"font-weight: 400;\">start-up loans<\/span><\/a><span style=\"font-weight: 400;\">, and <\/span><a href=\"https:\/\/swoopfunding.com\/na\/knowledge-hub\/equipment-leasing\/\"><span style=\"font-weight: 400;\">business leases<\/span><\/a><span style=\"font-weight: 400;\">, we have the financial tools to keep your business growing.&nbsp;<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A business without bookkeeping is a business risking failure. Bookkeeping builds the financial records that are essential for success, provides order and structure to business performance, and gives business owners and managers clear sight of how well their business is working. What is bookkeeping? Bookkeeping is a vital role for the smooth functioning of a [&hellip;]<\/p>\n","protected":false},"author":26,"featured_media":36264,"comment_status":"open","ping_status":"closed","template":"","category":[367,362],"class_list":["post-36263","blog","type-blog","status-publish","has-post-thumbnail","hentry","category-sme-support","category-swoop-guides"],"acf":[],"featured_image_urls_v2":{"full":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled.jpg",2560,1707,false],"thumbnail":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-150x150.jpg",150,150,true],"medium":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-300x200.jpg",300,200,true],"medium_large":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-768x512.jpg",768,512,true],"large":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-1024x683.jpg",1024,683,true],"1536x1536":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-1536x1024.jpg",1536,1024,true],"2048x2048":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-2048x1366.jpg",2048,1366,true],"image_blog":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-408x252.jpg",408,252,true],"image_blog_full":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-1775x660.jpg",1775,660,true],"image_podcast":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-397x298.jpg",397,298,true],"image_banking":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-30x20.jpg",30,20,true],"image_blog_internal":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-840x480.jpg",840,480,true],"image_blog_medium":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-1024x500.jpg",1024,500,true],"image_single_banking":["https:\/\/swoopfunding.com\/na\/wp-content\/uploads\/sites\/10\/2023\/08\/business-bookkeeping-featured-scaled-80x53.jpg",80,53,true]},"post_excerpt_stackable_v2":"<p>Read this article to me Powered by AiVOOV A business without bookkeeping is a business risking failure. Bookkeeping builds the financial records that are essential for success, provides order and structure to business performance, and gives business owners and managers clear sight of how well their business is working. What is bookkeeping? Bookkeeping is a vital role for the smooth functioning of a small business. It involves the day-to-day recording and reporting of an organisation\u2019s financial information, and it is different to accounting, which is the process of using the business\u2019 data to establish its financial position and make decisions&hellip;<\/p>\n","category_list_v2":"<a href=\"https:\/\/swoopfunding.com\/na\/category\/sme-support\/\" rel=\"category tag\">SME support<\/a>, <a href=\"https:\/\/swoopfunding.com\/na\/category\/swoop-guides\/\" rel=\"category tag\">Swoop guides<\/a>","author_info_v2":{"name":"Chris Godfrey","url":"https:\/\/swoopfunding.com\/na\/author\/chris-godfrey\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/blog\/36263","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/blog"}],"about":[{"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/types\/blog"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/comments?post=36263"}],"version-history":[{"count":1,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/blog\/36263\/revisions"}],"predecessor-version":[{"id":44410,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/blog\/36263\/revisions\/44410"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/media\/36264"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/media?parent=36263"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swoopfunding.com\/na\/wp-json\/wp\/v2\/category?post=36263"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}