WHAT THE ENTREPRENUERS MUST KNOW ABOUT BOOK-KEEPING AND ACCOUNTING TO GROW THEIR BUSINESS VENTURES RAPIDLY

By Nnabugwu Chizoba (Sustainability Accountant and Development Practitioner)

Before delving into any other aspect of this discourse, it is important to set the ball rolling by considering the two elements contained in the topic: Book-keeping and Accounts. A clear understanding of the two will give a strong direction to the discourse and help the reader take a more informed position.

Book-keeping, fundamentally is that aspect of accounting that is responsible for recording the financial transactions of any business entity, in a systematic manner. This recording is done in such a fashion that whenever the need arises, the entries can be relied upon to prove that such transactions occurred. 

As a planned and deliberate effort to fulfill the above very important objective the record must be kept in such a manner as to establish in particular the exact date, amount, items and personalities involved in a transaction. It should also be kept in a way and manner that guarantees easy tracing and/or linkage to source documents, which serve as evidence.

On a generally note, Accounting entails analyzing, classifying, interpreting, summarizing and reporting of transactions, which are considered essentially as data and major input of the Accounting process before an informed decision is arrive at.  

Book-keeping or Recording keeping is the job of a Book-keeper. He/she is not an Accountant and should never be addressed as such. The Book-keeper is not a Professional, but, his/her job is so essential for the growth of any business. This is the fundamental reason book-keeping is not a job for just anybody.

For impact, the Professional Accountants are usually engaged to design the Accounting books that are kept by the Book-keepers. The Professional Accountant is the one that should be saddled with the responsibility of engaging the right person for the job of a book-keeper. 

The nature or activities of a business concern and other factors, specific to the entity are the issues that fire the interest of Professional Accountants and guide their efforts when designing the books. As one would expect, the books, as designed, go a long way to influence or determine the personality that is considered suitable for the job. It is not as simple as buying the books and calling on anybody to do the recording or man the office as presently practiced by many business owners and entrepreneurs. The consequences of operating in this manner are numerous. I use this opportunity to discourage it.

Accounting services are offered by Professional Accountants. I will not be surprised if many people are confused by this submission. 

I am also not unaware of the likely challenges that this statement would have elicited in the mind of some Nigerians, who may not even care to seek further explanation beyond what they know, consider or assume before now. If the confused people are largely from the business class or the entrepreneurs, I will not be surprised. It is for this reason in particular that this clarification is made, to save them from the negative consequences, the reason of which most of them (business people and the entrepreneurs) have not developed beyond a certain limit, even when it is obvious that they’ve been in business for quite some time, in addition to huge financial resources passing through them.

It is important to add that the Professional Accountant’s job includes but not limited to performance and risk management. They form the cardinal objectives of professional accounting. 

The services of a competent Professional Accountant if effectively, efficiently, properly deployed, in any environment, what becomes manifest in terms of sustainable growth in the economy is usually stunning and unprecedented. This has reflected principally in different climes and has manifested in several ways that include the accelerating sophistication of techniques, methodologies, and system tools available for the production of new capitals for sustainable socio-economic development in nations.

The desire to have a business environment where businesses are conducted in a manner that matches up competitions and reduces adverse trends, make the role of the Professional Accountant inevitable.

Simply put, it is the Professional Accountant that is looked for, to define, evaluate, analyze, interpret and authenticate significant information concerning the financial health of any organization.