Financial Management

Book-keeping & Accounting

Every business needs to maintain their financial records. Without records, you cannot see how well the business is doing and where it is going. Book-keeping and accounting are essential to this aspect of your business.


1. Book-keeping

A book-keeper is a person that performs one or more of book-keeping duties. The main duty of a book-keeper revolves around "keeping the books" for a company/ business. In small businesses, the book-keeper may perform the entire book-keeping process, or might just enter data to give to the "accountant".

Book-keeping is a long process usually occurring daily, weekly, monthly and annually consisting of entering transactions into the journals, making adjustments, and preparing reports.

The importance of book-keeping:

  • It helps to keep track of sales
  • Doing book-keeping on a regular basis reduces stress and creates peace of mind
  • You'll avoid penalties and fines on late submissions of taxes
  • If you need to apply for a loan from a bank or financial institution, your up-to-date books will  supports your requests
  • Should you wish to sell your business, your financial records will serve as a back-up for your claim


Skills required for book-keeping

  • Reading: strong reading skills are important as book-keepers are required to source documents for financial data
  • Language: book-keepers are often required to explain book-keeping procedures to auditors. They also interact on a one-to-one basis with co-workers
  • Math: General background of math is required to calculate and adjust entries on financial statements and to calculate interest.
  • Learning: book-keepers must have strong reasoning skills and should be able to learn fast
  • Computer: Most book-keepers work on online systems.  They therefore need an in-depth understanding of how to use a computer

2. Accounting

Accounting reduces the likehood of business failure. It provides information which is necessary for taking business decisions.  Therefore it is critical that entrepreneurs understand the need for collecting and recording the information that will allow them to reach appropriate business decisions


Accounting skills

  • Cash flow projection: An accountant should be able to see whether the business will generate any profit
  • Interpretation of financial statements: When presented with a bank statement, an accountant is required to understand all the transactions that went through the business account and interpret these in order to give feedback if necessary
  • Break-even analysis 
  • Inventory accounting
  • Payroll functions
  • Accounting software (e.g Pastel/ Spread sheet)

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Last Update: 21 June 2010