Ethiopian Business Development Services Network (EBDSN)

 Accounting for Micro, Small and Medium Enterprises

Home  I  FeMSEDA  I  ReMSEDAs  I  Chambers  Finance  I   BDS providers  Networks I  Associations  I  NGO/Projects  I  Print-out info

 

 Business Environment
 Legislation 
 Support Institutions
 Photos+Success Stories
 Approach+Strategy
 Lessons learnt
 Library
 BDS News
 BDS relevant Links
 Sitemap
 Contacts

 

 Sector Development
 Textile and Garments
 Leather and Footwear
 Food processing
 Construction
 Sector-Library

 

 Business Information
 Start your Business
 Write a business plan
 Accounting
 Cost calculation manual
 Marketing guide
 Export-Import guide
 Trade fair guide
 Trade opportunities
 Investment guide
 Tender guide
 Women and business
 Organize MSE exhibition
 Loan conditions
 Vocational training
 Improve your
 business association
 Taxation
 Appropriate Technology
 Standards and Quality
 Country Info,
 Business environment

 

 

Website Statistics

 

 

 

    

Introduction  [ top]

Advice in accounting and bookkeeping for medium and large enterprises should be done by professionals. Most micro and small enterprise operators do not need a complex accounting system but a rather simple introduction to a cash book and introduction to how to produce and keep records in the form of receipts. Micro and Small Enterprises (MSEs) often face problems with regard to recording their daily transactions. This is due to the fact that most of the operators do not know how to make such records in a simple and easy manner. As a result, many operators find it very difficult to give information on their income and expenses and eventually do not know whether they have lost or profited from their business activities. The absence of recording has also caused some problems in handling customer needs, particularly in maintenance services and also in cases of sales on credit services. The lack of recording also makes it very difficult for the tax offices to levy reasonable taxes that are commensurate with the business activities. As a result, business operators complain on the taxes that are levied on them on the basis of estimation, which they say are too heavy to bear.
 

 
Accounting procedures 
and formats for micro and small enterprises 
[ top]

Micro and Small Enterprises (MSEs) often face problems with regard to recording their daily transactions. This is due to the fact that most of the operators do not know how to make such records in a simple and easy manner. As a result, many operators find it very difficult to tell their incomes and expenses and eventually don’t know whether they have lost or profited from their business activities.

The absence of recording has also caused some problems in handling customer needs, particularly in maintenance services and also to provide sales on credit services. 

The lack of recording also makes it very difficult for the tax offices to levy reasonable taxes that are commensurate with the business activities. As a result, operators are complaining on the taxes that are being levied on the basis of estimation, which they say are too heavy to bear.

  

Cashbook format  [ top]
The cashbook is very important to show the situation of the business at any moment in time, as it provides both the charges and credits for a any given period. The balance column is the difference between the charges and credits columns.

 

Cashbook

No.

Date

Description

Cash in

Cash out

Balance

Birr

Ct

Birr

Ct

Birr

Ct

1

2.2.04

Initial cash in

2 345

00

 

 

2 345

00

2

3.2.

Electricity

 

 

126

50

2 218

50

3

3.2.

Shop rent

 

 

930

40

1 288

10

4

4.2.

Sales of products

455

70

 

 

1 743

80

5

5.2.

Taxes

 

 

780

90

962

90

6

5.2.

Sales of products

1 675

80

 

 

2 638

70

7

5.2.

Raw materials

 

 

1 675

80

962

90

8

7.2.

Sales of products

780

45

 

 

1 743

35

...

...

...

 

 

 

 

 

 

 

Electronic cashbook  [ top]

For small and medium enterprises with electronic facilities, an effective but simple system is that on an Excel sheet. The following cashbook for download has the same structure as the cash book above but adds up automatically.
cashbook-1.xls
(take the right mouse button for download)

 

Electronic cashbook with accounts  [ top]

The electronic cashbook with accounts includes several columns for accounts as charges for equipment, personnel, sales etc. By recording the cashbook journal, the accounts are calculated automatically. cashbook-2.xls (take the right mouse button for download)

 

 Electronic cashbook with accounts

No.

Date

Acc

Description

Cash in

Cash out

Balance

1

2.2.04

10

Initial cash in

2 345.00

 

2 345.00

2

3.2.

51

Electricity

 

126.50 

2 218.50

3

3.2.

52

Shop rent

 

930.40 

1 288.10

4

4.2.

10

Sales of products

455.70

 

1 743.80

5

5.2.

53

Taxes

 

780.90 

962.90

6

5.2.

10

Sales of products

1 675.80

 

2 638.70

7

5.2.

61

Raw materials

 

1 675.80 

962.90

8

7.2.

10

Sales of products

780.45

 

1 743.35

9

8.2. 

61

Raw materials

 

345.70 

1 397.65

10

9.2. 

51

Water

 

125.60 

1 272.05

Sum / Balance 

5 256.95

3 984.90

1 272.05

 

E.g. all entries with the account number 61 may automatically be filtered and added (see cashbook-2.xls on the web page).

 

 Autofilter for account No. 61

No.

Date

Acc

Description

Cash in

Cash out

Balance

7

5.2.

61

Raw materials

 

1 675.80 

962.90

9

8.2. 

61

Raw materials

 

345.70 

1 397.65

Sum of account no. 61 

 

2 021.50

 

 

 

Records for maintenance services  [ top]

This format helps to record items that are brought to the operator for maintenance purposes.  As the format has columns for date the items are received, name of client, type of item and the date on which the maintained item is submitted to the customer, it helps to organize the operator and provide efficient service.  This format helps to avoid problems of messing the items and keeping appointment dates for delivery of the items.
Records on maintenance services
No. Date item received Name of client Type of item received Estimated fee to be paid Date of submission Signature
             
             
             
             

 

Receipt format  [ top]

Name of the Business
Address

Receipt No.:

Date:

Qty

Description

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ser. Tax