Good books answer three questions on any day: who owes me, who do I owe, and did we make money this month. Everything else — VAT returns, the bank, the loan application — is a report built from the same records. Here is the smallest set of habits that keeps those answers true.
The five documents
- Quotation — what you offered, so the invoice does not become a negotiation.
- Invoice — what the customer owes, numbered in sequence, with VAT shown on its own line.
- Payment — the money that arrived, matched to the invoice it settles, by M-Pesa, bank or cash.
- Bill — what a supplier is owed, with the input VAT you will claim.
- Expense — everything else that left the business, by category.
The weekly routine
- Record every invoice the day you send it and every bill the day it arrives.
- Match payments to invoices — the receivables report is only right when this is done.
- Reconcile M-Pesa and the bank: every deposit is a payment, an owner's contribution, or a mistake.
- Chase from the ageing report — the customers at 60 and 90 days are the ones to call.
The reports, in the order an owner reads them
- Receivables ageing — who owes you and for how long.
- Payables ageing — who you owe and what is late.
- Profit and loss — income net of VAT, less cost of sales and expenses.
- Cash flow — what actually moved, which is not the same thing.
- Tax summary — output VAT less input VAT, the figure your return needs.
- Balance sheet, trial balance and general ledger — for the accountant, the bank and the audit.
What makes an accountant's month easy
Sequential numbering with no gaps, voids with reasons rather than deletions, VAT on every document, and an export they can open. If your till, your restaurant and your hotel all post their sales into the same books, the accountant reconciles one set of numbers rather than four.
Doing it in NodePoint Accounts
NodePoint Accounts & Books keeps the five documents, matches payments to invoices, produces the thirteen reports above with charts an owner can read at a glance, and takes sales from Retail POS, the restaurant and the hotel into the same ledger. Everything exports to CSV. It is priced per business with unlimited users — see pricing.
Related: KRA eTIMS in plain English and keeping books in more than one currency.