Ipyet/Book Keeping

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Module 2.1: Book Keeping For Youth Entrepreneurs
A discussion paper by
Naomy Lintini

Welcome to this session on the ‘’’importance of bookkeeping for youth entrepreneurs’’’. As you may know, entrepreneurship is about ‘’the practice of enterprise’’, in other words, the act of running a business. Bookkeeping is the cornerstone of the practice of enterprise.

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To enable participants discuss the importance of record keeping and how best the topic can be delivered to youth entrepreneurs.


In this topic we will discuss the ‘’’key elements in bookkeeping training delivery‘’’, and how facilitators can encourage youth entrepreneurs to keep proper books of accounts in their enterprises. We will also discuss the challenges that facilitators face in delivering the topic of bookkeeping to youth entrepreneurs. The session will cover some of the participatory training methods that encourage learning among the youth. I invite you to discuss your various experiences and to share some innovative training approaches that help delivery of book keeping training to youth entrepreneurs in an engaging manner.

Session Outline

  1. Definitions and key elements in book keeping training
  2. Facilitation considerations and Facilitators Preparedness
  3. Challenges in delivering Book Keeping Training

Key Elements and Definitions in Book Keeping Training


Bookkeeping training deals with the preliminary processes that entrepreneurs must undertake to ensure that business records are well documented. The business records are supposed to help a youth entrepreneur to assess whether his or her business is performing well or not. Book keeping therefore helps youth entrepreneurs to make better decisions in their businesses.

A good facilitator must ensure that youth entrepreneurs understand and assimilate the key elements in book keeping. The secret to achieving this lies in ‘’’demystifying’’ the subject in order to help the youth overcome their phobia for “maths”

Definitions and Key Elements in Bookkeeping

What is Bookkeeping?

Book Keeping is the process of recording business transactions in a systematic manner. For youth entrepreneurs to achieve this, they need to use proper accounting books and documents. Book keeping is mainly concerned with documenting how ‘’money comes in and goes out of the business’’. It involves collection and recording of financial information in order to maintain reliable business records for ‘’preparation of financial statements’’. An overview of a simple record keeping system that youth entrepreneurs can use is given in fig 1 below. NB it is important for the entreprenuers to know sources of money coming in and money coming out especially types of costs(Direct and Indirect costs) when doing bookkeeping.This help to reduce unneccesary costs.

Key Elements of Bookkeeping training

For youth entrepreneurs to understand and assimilate the topic of bookkeeping, certain key elements and concepts must be covered. These include:-

Definition and importance of bookkeeping

This session should be aimed at assisting participants to get an overview of the topic and how it relates to their day to day business activities. The session should create the tone for the rest of the book keeping training. A role play or case study which participants can relate with makes a very good introduction to this topic.

How to generate source documents and books of first entry

This session should assist participants understand why business transactions must be documented and how the process of documentation should be done. The importance of generating these documents must be clearly appreciated by participants.

How to maintain a cash/record book

A cash/record book is the heart of any enterprise. This session should be the core element in any book keeping training. Facilitators must ensure that participants leave the training room with a good understanding of what a cash/record book is and the skill of how to fill in a cash/record book. Participants must clearly understand the link between the various books of first entry such as receipt books and the cash/record book.

These three elements can be considered as the key learning points in bookkeeping training. The facilitators must therefore identify and track specific learning outcomes for each of the three sessions.

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Are there any other topics not mentioned above that you consider key to a basic book keeping training?

Simple Record Keeping System

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Fig 1: Simple Book Keeping System

Record Keeping Definitions

One of the first facilitation considerations in delivering bookkeeping training is to demystify the topic by clarifying key terms. Some of the main definitions that youth entrepreneurs must understand are listed below.


A transaction is a single business activity in which an exchange of cash for a product or a service happens. An example of a transaction is when a customer pays money in exchange for a chair or a customer pays money in exchange for a haircut.

Source Documents

These are documents in which the transactions of an enterprise are first entered or recorded in a systematic manner. Examples of source documents include receipt books and payment vouchers. Source documents are the only proof that a business transaction took place.

Books of first Entry

These are the basic books of accounting in which all t transactions arising from source documents are first recorded. The type of book to use depends on which transaction has taken place. For example if cash sale has occurred then a receipt is raised and the transaction is recorded in the sales day book.

Cash Book/Record Book

A cash book is a simple record in which an entrepreneur records all payments made and income received. The cash book helps the entrepreneur to organize business finances in a professional manner. The cash/record book acts as a reference document in the process of running a business

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There are many other definitions that need to be clarified in order to demystify the topic of Book keeping. Identify at least five more terms that must be clarified for young people.

1. Double Entry Bookkeeping This is the standard in the industry and no matter where you go in the world the same theory will apply. The names might change, but the underlying concept will not. Debits and credits are almost an international language in themselves.A credit entry is always a negative amount. To credit an account means to enter a negative amount into that account. If the account is an Asset or Expense account a credit will decrease the balance of that account. If the account is a Liability, Capital, Profit and Loss, or Income account a credit will increase the balance of the account.Debit - A debit entry is always a positive amount. To debit an account means to enter a positive amount into that account. If the account is an Asset or Expense account a debit will increase the balance of that account. If the account is a Liability, Capital, Profit and Loss, or Income account a debit will decrease the balance of the account.

2.Financial Report/Balance SheetAll the transactional information that has been input has a purpose and you need to know what that output is. Having a basic understanding of what an income statement or a balance sheet is, is important.

3. Organizational StructuresIt is important to understand that there are different organization structures and they all have slightly different approaches to bookkeeping. A small family partnership is different to a listed company. They use the basics in slightly different ways.

4.Bookkeeping programsDo They Need Bookkeeping Programs In Their Business? Once upon a time, before bookkeeping programs were a common thing, all bookkeeping entries were done by hand. Large ledger books recorded the transactions of an organization. This was a time consuming exercise, and relied on having staff with excellent numeracy and accuracy skills. Today bookkeeping programs are commonplace in almost all organizations, from the largest multi-national down to the one man start up business. Their lower cost and increased efficiencies make them a practical addition to any business. When looking at bookkeeping programs youth need to be sure that it covers the areas their business needs, but is not too complex for their organization. Larger companies need programs that routinely handle complex multi currency and consolidation needs. A smaller business does not usually have that same need. At the same time they need to choose bookkeeping programs that will accommodate any growth or changes their business is likely to go through in its life-cycle. By evaluating their bookkeeping program needs they will end up paying an appropriate purchase price and ongoing maintenance costs.

Advantages of Bookkeeping ProgramsOne of the biggest advantages of good bookkeeping programs is that it reduces the need for manual calculations as long as the right data is input. They also build in checks and balances that reduce the likelihood of human error. From all this input and care, financial statements can be produced at the press of a button. This is a far cry from the manual processes associated with a hand written, manually calculated column totals of a paper based ledger system. Comprehensive bookkeeping programs will automatically populate all transactions through the appropriate ledgers. If an invoice is entered it will not only create the invoice, the dollar values should also be reflected in the General Ledger and Inventory modules, if you were using an inventory module. From this information your organization will have automated reporting – one click of the button and it should pop out. Different queries should be able to extract information you need for analysis or reporting purposes. And ideally you should be able to export this all to a spread-sheeting program if you want to do further number crunching.

WHY IS BOOKKEPING NECCESSARY? Bookkeping is neccessary for every business. Neat and accurate record helps one to identify and deal with their problemsealier. records help to control cash flow, show you and others how your business is performing, plan for your future and to calculate profit and loss

5.Calendar Year - The 12 month period from January through December, as shown on a calendar

Facilitation Considerations and Facilitators Preparedness

In delivering the bookkeeping concepts itemized above, a facilitator must consider the following factors.

Simplicity and sequential training delivery

The aim of training is to ensure that learning takes place and knowledge of bookkeeping concepts and basic skills are assimilated. To achieve this effectively, the bookkeeping content must be delivered in simple everyday language and not in accounting jargon. The content must be broken into small digestible units which must be delivered in sequential manner, whilst ensuring that the individual units build on each other.

Visualizing and contextualizing the Book Keeping content

The content must be delivered in an easy to understand manner. Participants must visualize the bookkeeping process. The facilitator is encouraged for example, to put some content into pictures and diagrams. Arrows must be used to show the processes and the relationship between elements. Fig 1 above is a good example how a facilitator can help participants visualize training content.

Case studies and examples can help participants to contextualize the application of bookkeeping concepts. Facilitators are encouraged to use a single case study or some practical examples to help the participants understand how the concepts are applied.

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Which other training methods will you employ in delivering a book keeping session to youth entrepreneurs?

Facilitators’ Preparedness

Preparation is the key factor in successful delivery of bookkeeping training. This preparation is a process that must start far ahead of the actual training delivery and must include among other things the following:-

  • Facilitators must have good facilitation skills and knowledge of principles of adult learning
  • Facilitators must have a good knowledge and understanding of the bookkeeping topic.
  • Facilitator must be familiar with participatory training methods.
  • Facilitator must have a profile of the participants before the training
  • Facilitator must pitch the training to the level of the participants

Facilitator must include practical examples especially those of young people self.

Challenges in delivering Book Keeping Training

There are a number of challenges that can face a facilitator in a book keeping training situation. Some challenges arise out of poor preparation on the side of the facilitator while others arise from factors beyond the facilitators’ control. Whatever the source of the challenge, the facilitators must endeavour to address the challenges.

Challenge of achieving participatory training within limited time allocation

It is always tempting for facilitators to ‘lecture their way through the whole book keeping session’ without allowing participants to get actively involved in the session. This challenge facilitator’s face is that there is usually limited time allocated to book keeping sessions. Some ways of addressing this challenge can include:-

  • Preparing a time bound session plan to guide delivery of the content in a specified time
  • Giving the workshop material to participants in advance, so that the content is not totally new to them at the start of the training
  • Giving participants some ‘home work’ to that some activities are done outside formal session time
  • Focusing training delivery to the key learning outcomes that must achieved by end of the session.

Challenge of delivering bookkeeping training to participants of different education levels

Another common challenge among facilitators is how to effectively deliver same content to participants at different levels of understanding. In such a situation, the facilitator is torn between trying to make the ‘slow learners’ understand the content and to keeping the ‘quick minds’ from getting bored. Some ways of addressing this challenge include:-

  • Facilitator should be part of the participant selection process so that he/she can put the participants in more homogeneous groups.
  • Facilitator should divide class into ‘discussion/learning’ sub groups in which each sub group has an almost equal number of the less educated and the more educated.
  • Facilitator should use participants with higher levels of understanding a ‘peer educators’ within the sessions.
  • Facilitator must visualize most of the training content and engage participants in exercises that they can relate to.

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What challenges have you faced in delivering bookkeeping training to youth entrepreneurs and how did you address the challenges

Further Reading

  • ILO SIYB, (1997) Record – Keeping
  • www.bookkeeping-course.com,(2011) Book Keeping course
  • www.articlesbase.com/outsourcing-articles, (2008) Importance of Bookkeeping

Next Module

Module 2.2: Financial Management in SMEs

Proper and understable (redable) records by young people. A number of them tries but their books could be difficult to understand. A simple record keeping is needed that will allow them to follow and even make those assisting them understnd their records.

Ability to write and calculate.