Ask many small business owners how much profit they made last month and the honest answer is: “I am not sure.” Money comes in and goes out through cash, mobile money and the bank. Some of it pays for stock, some for school fees, some for transport. By the end of the month, nobody can say what the business really earned.
You do not need an accountant or software to fix this. You need simple bookkeeping: three short records and 15 minutes a week to keep it up to date.
Why simple books matter
- You know if you are making money. Busy is not the same as profitable.
- You catch problems early: a product that never sells, a cost that keeps rising, money going missing.
- You become easier to lend to. Lenders want to see records over time. Our articles on why the bank keeps saying no and cash-flow lending explain why.
- Tax and registration become easier because the numbers are already there.
Set up once: three simple records
Use a notebook, or a free spreadsheet such as Google Sheets on your phone. Keep three pages or tabs.
1. Money in
Date, what was sold, amount, and how it was paid (cash, mobile money, bank). Record only money you actually received. Sales on credit go in “Who owes what” until the customer pays. Write loans, grants or money you put in yourself on a separate line marked “not sales”.
2. Money out
Date, what it was for, amount, and how it was paid. Group costs into a few headings: stock, rent, transport, utilities, staff, other. Keep loan repayments, equipment purchases and money you take for yourself on separate lines. These are not running costs.
3. Who owes what
Customers who owe you and suppliers you owe, with amounts and due dates.
Daily: 2 minutes
- Keep every receipt, or take a photo of it, in one place.
- At closing time, write down the day’s total sales and any big payments.
- Do not take money from the business for personal use without writing it down.
Weekly: 15 minutes
- Bring the week together. Copy daily totals and receipts into your money in and money out records.
- Check against your statements. Download or open your mobile money and bank statements and tick off each item. Anything you cannot explain, follow up.
- Count your cash. Does the cash in hand match what your records say it should be?
- Update who owes what. Chase anyone who is late.
- Write one number: your weekly net cash movement, which is money received minus payments made. This shows whether your cash went up or down. It is not your profit.
Monthly: 30 minutes
- Add up the month’s money in and money out by heading.
- Count your stock and note its value.
- Work out your rough profit: the month’s sales (including credit sales), minus the cost of the goods you actually sold (stock at the start, plus stock bought, minus stock left at the end), minus running costs such as rent, transport, utilities and staff. Leave out loans, loan repayments and large equipment purchases.
- Compare with last month. What went up? What went down? Why?
Use the monthly numbers when you set prices. Our guide to pricing your products for profit shows how.
The golden rule: pay yourself a salary
The biggest reason small business books stop making sense is that personal and business money are mixed. Choose a fixed amount to pay yourself each week or month, move it to your personal account or wallet, and stop taking money from the till. Our article on treating mobile money records as a business asset explains how a separate business wallet helps.
A simple example
Example (for illustration): Kwesi runs a small provisions shop in Sunyani. He kept no records and always felt short of money. He started a three-tab spreadsheet on his phone and spent 15 minutes every Sunday matching it to his MoMo and bank statements.
After six weeks he spotted two things. A brand of cooking oil he stocked heavily barely sold, tying up money on the shelf. And he was taking around GHS 400 a week from the till for home without noticing. He cut the slow stock, set himself a fixed weekly pay, and for the first time could tell his savings group exactly what the shop earned.
Common mistakes
- Waiting until the end of the year: a few minutes weekly is far easier than a month of guesswork.
- Recording only sales: without costs, you cannot see profit.
- Treating cash as profit: borrowing GHS 10,000 raises your cash but not your profit, and buying GHS 5,000 of stock is not a GHS 5,000 cost until that stock is sold.
- Forgetting small cash spending: it adds up. Keep a note of it.
- Throwing away statements and receipts: keep them. Lenders and the tax office may ask.
Start this week
- Create your three records in a notebook or spreadsheet.
- Pick a fixed 15-minute slot each week and put it in your phone as a reminder.
- Download last month’s mobile money and bank statements.
- Decide your own weekly or monthly pay.
- At the end of the month, work out your profit for the first time.
The EDOKAN Academy covers record keeping and basic finance in plain language.
