If you do business in Nigeria, every kobo counts and manual bookkeeping will cost you more than a few kobo. Unfortunately, many business owners, particularly small and medium enterprises (SMEs), still rely on manual bookkeeping. While this might seem like a cost-effective approach because it only requires a notebook, a pen and a calculator, it often leads to hidden costs that could stifle your business’ growth in the long run. This blog will explore five ways manual bookkeeping drains your resources and provide actionable solutions to pivot towards efficient financial management.
Costs of Manual Bookkeeping
1. Increased Risk of Errors
Manual bookkeeping is prone to human error. Simple arithmetic mistakes or misclassifying transactions can lead to significant discrepancies in your financial records. For instance, imagine counting the number of bags of rice in your shop and mistakenly noting down ten instead of twelve. This small error can result in underreporting your inventory and lost sales opportunities.
How to Fix It
To reduce errors, consider transitioning to a digital bookkeeping system like Veedez. Our app automates calculations and categorises transactions, drastically minimising human error. Plus, with real-time updates, you can always be assured of an accurate picture of your business finances.
2. Time Consumption
Running a business is already a full-time job, and pouring hours into manual bookkeeping takes you away from core operations. We realised that many Nigerian SME owners typically spend hours weekly trying to adjust their books. Many said they do this at home, reducing their rest time. In contrast, others do it at their shops or businesses, reducing the time spent on customers and other income-generating activities.
How to Fix It
Utilise automated tools that streamline your bookkeeping process. Veedez allows you to track income and expenses effortlessly, freeing up valuable time to focus on scaling your business. Think of it as hiring a virtual assistant—your business will thrive with more attention dedicated to its growth.
3. Difficulty in Tracking Financial Health
Obtaining an overview of your financial health can be daunting when using manual methods. Imagine wrangling a dozen receipts, bank statements, and ledgers to understand if your sales have increased this month. This lack of insight can lead to poor decision-making.
How to Fix It
With Veedez, the picture is clearer. The app provides instant access to financial reports, analytics, and trends. You can track your cash flow, profit margins, and expenses with a few clicks. This visibility enables you to make informed decisions, just as a driver needs a map to navigate efficiently.
4. Missed Opportunities for Growth
Manual bookkeeping often limits your ability to spot trends and opportunities. If you’re unaware of which products are selling well and which aren’t, you might miss out on adjustments that could drive sales. For example, if you run a fashion store but fail to notice that your summer collection is flying off the shelves, you may not replenish the stock in time, resulting in lost sales.
How to Fix It
Use an app like Veedez that tracks your sales patterns over time, providing valuable insights into what products perform well. It’s like having a crystal ball for your business—enabling you to make proactive decisions rather than reactive ones.
Conclusion
While manual bookkeeping may seem cost-effective initially, the hidden costs and inefficiencies can prove detrimental to your business. By transitioning to digital solutions like Veedez, you save time, reduce errors and position your business for growth and success. Embrace the power of technology, and watch your business thrive in Nigeria’s dynamic marketplace! If you haven’t already, consider downloading Veedez today to simplify your bookkeeping and unlock valuable insights for your business.