Record keeping is important in a business for it is the only way to inform the entrepreneur how the business is doing. In order to analyze the ‘health’ of your business you need data! Therefore, a systematic process of gathering data and recording it should be set up. The following documents should be kept:

• Production records;
• Operation records such as labour, farm inputs, tools and equipment costs;
• Cash transactions.

Importance of Record Keeping

You might be thinking just how critical is the keeping of records? It is important to keep records for the following reasons:

• Future reference;
• Keeping track of business transactions;
• Filing of taxes;
• Compiling final accounts.

In order to fulfil the needs identified above you will need different sets of records. An entrepreneur should maintain records to meet his or her business requirements.