Africa-Press – Ghana. Mr Gilbert Yirenkyi Addo, Associate Director, Business Tax at Deloitte Ghana, has emphasised the importance of record keeping to the growth of small and medium enterprises (SMEs), indicating that it is non-negotiable.
Mr Addo, speaking at a one-day SME Business Interaction Session, stated that it was essential that SMEs keep records to serve as the backbone of accounting, as it would help the company’s accounting trail for the preparation of the necessary documentation.
The interaction organised by the Access Bank (Ghana) PLC, in partnership with Deloitte, was held on the theme “SME Financial Empowerment: An Imperative for Business Resilience.
In an interview at the event, he said it would also aid business owners in having an efficient business process in place, adding further that it was also a legal requirement.
“GRA is expecting that you file your returns with them. How will you file it when you don’t have data? What are you going to put on the return?” He questioned adding that it is also a regulatory requirement for the registration of companies per the Companies Act, which requires that companies keep a proper book of accounts.
He added that it is also a regulatory requirement to keep a proper book of records for both sole proprietorships and partnerships, as it helps with the efficient running of business operations, indicating that it also helps businesses to get access to facilities such as loans and grants from government agencies as well as access banks. If you want a facility, you can’t just walk into the banks.
Mr Addo explained that “If you want a loan facility as a company, the bank will need to have comfort that whatever you are doing is credible and good, and it will lead to a win-win situation for both parties. So, the bank will do what we call ‘Know Your Client’ to ensure that the risk they are taking on is manageable, and I can only access the manageability of the risk if there is data.”
According to him, most SMEs treat the business like a personal thing, indicating that it should not be so; therefore, they must decouple the business from themselves, stressing that “If you run a company, you are distinct from the company. If you run a sole proprietorship, yes, you are as good as the sole proprietorship as an individual, but in terms of reporting, you are seen
as distinct. And you can only be able to do these things properly if you have maintained records.”
Explaining further, he noted that the Revenue Administration Act, Section 27, requires that taxpayers maintain appropriate documentation in terms of receipts, invoices, company registration and documents, stressing that failure to do so attracts sanctions.
“If you don’t have them, there are sanctions that will be triggered, and that will also affect you. Imagine you’re doing your business, and you must appear in court because you have not kept proper business. Imagine you have to pay huge taxes because you have not kept proper records, and when you do that, you rather overly expose yourself to unnecessary risk, so it is imperative that you keep records that speak to the activities that you have engaged in and that will help in the growth of your business.”
The Deloitte Associate Director averred that they were of the view that an SME today is the big company to be seen in the future when proper structures are put in place to drive the growth of the company.
He noted that to help build structures, such workshops were essential to propel future growth of business and, by extension, the growth of the economy.
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