Keeping Records and Preparing for Tax

Record sales, spending and money movements so you can check cash and ask accurate tax questions.

Part 7 of 10 | Starting a Small Business in The Gambia

Learning goals Keep a simple cash record, distinguish sales from funding and reconcile a balance. Your output is a practice ledger, evidence filing system and tax-enquiry checklist.

Before you begin Allow 90 minutes. You can use a ruled notebook or spreadsheet. Practise with invented transactions; do not put real customer details or identity documents in coursework. These management records are a starting point and may not satisfy every statutory accounting or invoice requirement.

Record the transaction when it happens Give each transaction a date, reference, description, category, amount in, amount out and payment channel. Keep a supporting receipt, invoice or other evidence where available. An invoice requests payment; a receipt acknowledges money received. Number your records consistently so you can connect the money movement to the customer order or supplier purchase.

Write descriptions that will still make sense next month. Materials for five alteration jobs is more useful than expenses. If evidence is missing, record the facts and seek a duplicate; do not fabricate a supplier receipt. Correct mistakes with a visible explanation or an amendment entry so the history remains understandable. Avoid erasing a problem to force the balance to match.

Separate categories with different meanings Sales, owner contributions and borrowed money all may increase cash, but only sales represent revenue from customers. Owner withdrawals reduce available cash without automatically being an operating expense. Loan principal repayment and interest also have different accounting meanings. Keep them separately labelled so a qualified adviser can determine the proper treatment.

For a business selling on credit, record the amount owed, due date and later payment against the original invoice. Do not count the later collection as a second sale. Maintain a separate list of unpaid customer invoices and unpaid supplier bills. A simple cash book alone cannot show all profit, stock, asset and liability information.

Reconcile the cash you actually hold Reconciliation means comparing the record with independent evidence and investigating differences. Suppose the cash box opens with D500. You collect D900 cash sales, pay D250 for materials and take D100 as an owner withdrawal. The expected closing cash is D1,050. Count the physical cash privately and compare it with that figure.

If you count D1,020, record a D30 difference for investigation. Check change given, duplicate entries, missing purchases and amounts put somewhere else. Do not invent a D30 expense simply to balance. Reconcile each payment channel separately. Moving D400 from the cash box to a business account reduces one balance and increases another; it is not a new sale or a cost of trading.

Preserve useful evidence safely Create folders by month for sales, purchases, payment records, agreements and official correspondence. Keep customer information only where needed for delivery, records or applicable obligations, with access restricted to authorised people. Store a backup separately from the main device and test that you can retrieve a sample. A phone containing the only copy can be lost or damaged.

Ask GRA or a qualified adviser about required records, acceptable formats, invoice details and retention periods for your business. Do not choose a deletion date merely because the course exercise is finished. Keep records understandable to someone else, and ensure anyone helping with the books knows the same categories and numbering method.

Turn tax uncertainty into specific questions GRA's Domestic Taxes guidance distinguishes TIN and tax-type registration. It describes self-assessment and taxpayer services. Ask which taxes apply to your activity and structure, how taxable amounts are determined, which returns are required, and the current filing and payment deadlines. Request confirmation of applicable VAT registration and invoicing rules rather than copying another trader's treatment.

Bring estimated turnover, cost records, ownership information, intended staffing and any import plans to the enquiry. Ask whether returns are required during a period without sales and how to correct an error. Record the answer, date and official reference. This course deliberately supplies no tax rate, exemption threshold, retention period or universal due date that could be misapplied.

Guided exercise 1. Make a cash record for the opening D500, D900 sales, D250 materials and D100 owner withdrawal. Calculate the closing balance and label each movement correctly.

2. Compare the result with a D1,020 physical count. Write an investigation note listing three checks you would perform. Leave the difference visible until explained.

3. Add a D400 transfer from the cash box to a business account. Show the decrease and increase in separate channels without adding revenue or expense.

4. Draft an invoice log for a D150 unpaid job and its later payment. Use the same invoice reference so the sale appears once and the balance owed becomes zero.

5. Build your monthly evidence folders and tax-enquiry checklist. Mark each tax answer awaiting confirmation until you have a reliable response.

Knowledge check 1. What closing cash should the initial record show?

2. Is a loan received a customer sale?

3. Why must the D30 cash difference remain visible?

Answer guide 1. D1,050: opening 500 plus 900 minus 250 minus 100. After the separate D400 transfer, expected box cash is D650 and the account increases by D400.

2. No. It is funding with a repayment obligation and needs a separate category.

3. Concealing it with an invented entry destroys the evidence needed to find the error or loss.

Completion standard Produce a reconciled expected balance, a documented discrepancy investigation, a correctly paired transfer and a credit-sale example without duplicate revenue. Complete the tax-question list and answer all checks accurately. You should be able to find the evidence for any practice entry within two minutes.

Sources and verification notes

Gambia Revenue Authority Domestic Taxes Department. Checked 14 September 2026. Distinguishes TIN and tax-type registration and describes taxpayer services, declarations and payments. This course does not prescribe rates, thresholds, deadlines or individual tax treatment.