Good bookkeeping is not about producing a beautiful year-end report. It is about being able to answer simple questions at any time: How much did we sell? Who owes us money? What do we owe? How much cash do we really have? What tax filings are coming?
The five-record system
- Sales: invoice number, customer, date, taxable value and collection status.
- Purchases/expenses: supplier, bill, purpose, tax treatment and payment status.
- Bank/cash: every movement matched to a business explanation.
- Tax: VAT/TDS/income-tax schedules as applicable.
- Assets and liabilities: loans, fixed assets, deposits, receivables and payables.
A 60-minute month-end routine
Close the sales list, capture missing expenses, reconcile the bank, count/confirm cash, review unpaid invoices, review supplier balances and save a digital backup. Then compare the month with the previous month and ask why revenue, margin or expenses changed.
Never treat the company bank account as a wallet
Owner withdrawals and personal expenses should be identified and recorded correctly. Mixing them with genuine business expenses creates tax risk and makes management accounts misleading.
Use a document rule
No transaction should be posted without reasonable supporting evidence. Photograph or scan paper bills, use consistent filenames and store documents by fiscal year and month.
The hidden benefit: better decisions
Clean books help you price correctly, identify slow-paying clients, see which costs are rising and understand whether profit actually becomes cash.
Frequently asked questions
Can I do bookkeeping in Excel?
A very small business can use a disciplined spreadsheet system, but the records must be complete, consistent, backed up and capable of supporting tax and financial reporting. As transactions grow, accounting software is usually safer.
How often should books be updated?
Monthly is a practical minimum for many small businesses; high-volume or cash-heavy businesses often need weekly or daily recording.
Official sources & further reading
- Inland Revenue Department — FAQ
- Office of Company Registrar — Activities Required After Incorporation
Rules, thresholds, rates and filing processes can change. Check the current law and official portal before relying on an older guide.
Need help applying this to your business?
General guidance is useful for understanding the issue. Your actual records, registrations and circumstances may require a different treatment.