Information is power as they say. In business this is true and on average the more information you have the better. This is true of information from the outside and is also true when it comes to information from inside your business. Information about the smallest details can help you grow more than you ever thought. Of course, this means you have to do the donkey work of keeping the records in the first place. Unattractive I know but this could be the activity that makes your business tick so well customers will not only want to work with you but stay with you. So how do we go about setting up a record-keeping system?
Consult a professional
Here’s the thing about record keeping, it is done for various reasons. Off the top of my head, I can think of accounting, tax, warranty, asset registers and many more reasons. So what I would recommend you do first, is get professional help. Your record system cannot pick and choose between these things but must satisfy all that are relevant to your business. So you will need the help of someone who at the very least understands these matters. I had the unfortunate experience of telling a person they could not claim certain customs rebates because they had not kept a certain receipt when they purchased an item. The point is to get someone who knows what’s important to help you with the next step.
Start with why
It doesn’t matter how important the thing is, if you don’t know why you’re doing it you will struggle to find the motivation to do it consistently. You may do it for a week or two but in the long run, you can’t keep to things you don’t have reasons for doing. Every member of your business must be aware of the why behind the record-keeping system. Aware in a manner they understand. Make sure each person understands the need for record-keeping in their role or position. Why they must keep that receipt or write that slip or whatever it is. If you’ve ever had the fortune or misfortune of seeing the chaos that reigns when companies are about to be audited and people are asking for 9-month-old receipts it will make sense.
The whole idea behind a record-keeping system is substantiation which is an awfully long word for evidence. When it’s tax time ZIMRA would love to take your word for things but they, unfortunately, need evidence. The same goes for ownership of assets, payment records, sources of income and any other transaction your business goes through. It is ultimately about what you can prove. So your record-keeping system should be focused on keeping evidence of transactions and activities and not keeping every single piece of paper. And this is why we start with why. When we know the reasons we are keeping records we also know what to keep.
Keep a paper trail
The Paper trail is of course both literal and figurative here. We’re in 2022 and I firmly recommend keeping records digitally. There’s cloud storage for keeping scans of your receipts and invoices. You can use a professional scanner or innovative phone apps to capture scans of documents. It is best to keep both digital and physical copies for anything done within 18 months. Thereafter keeping digital copies only is acceptable depending on the size of the transaction and purpose. Just remember that ink wears off on paper and you should check to make sure your important documents haven’t suffered due to this. Having digital copies is a safeguard against this.
Get the right Frequency
Staying on top of your record-keeping system is just as important. By staying on top I mean reviewing the system and double-checking. It’s not the same for every business. I have worked in a business that would process 2-3 invoices per month and a business that process hundreds and thousands of invoices a month. The point is you cannot treat review of these record-keeping systems the same. So if you’re processing hundreds of transactions a day reviewing records may be best done every week. The nature of the business is also informative in this regard. You may need trial and error to figure out the right frequency in your business and this may change with time.
These records can be used to feed data analytics which is not just about social media and websites as many believe.