UNIDO

FOUNDED BY THE EUROPEAN UNION

Training Manual on Business Management, Accounting

Bookkeeping and Entrepreneurship

UNIDO Project on Enhanced Local Value Addition and

Strengthening Value Chain, South Sudan

Funded by: The European Union

Prepared By
Global Agriculture Innovation And Solutions
YWCA Compound, Yambio County,
Gbudue State, South Sudan
 Disclaimer:
This document has been produced with the financial assistance from the European
Union. The views expressed herein can in no way be taken to reflect the official
opinion of the European Union.

This document is not formally edited by UNIDO. The designations employed and
presentation of the material in this document do not imply the expression of any
opinion whatsoever on the part of UNIDO concerning the legal status of any
country, territory, city or area of its authorities or its economic system or degree of
development. Mention of firm names or commercial products does not constitute an
Preface.................................................................................i
Acknowledgement.................................................................iii
Module 1: Basic Entrepreneurship...........................................1
1.1. Introduction to Entrepreneurship............................2
1.2. Benefits/importance of entrepreneurship..................2
1.3. Business.............................................................2
1.4. Business Ownership.............................................2
1.5. The Importance of Practicing Business Ethics..........3
1.6. Problems Faced by Business Owners.....................4

Module 2: Importance of Bookkeeping......................................6
2.1. Bookkeeping........................................................6
2.2. Advantages of regular record-keeping....................6
2.3. Disadvantages of not keeping records or keeping
poor records........................................................6
2.4. Importance of Bookkeeping...................................7
2.5. Income and Expanses............................................7
2.6. Basic calculations and use of symbol and
drawings.............................................................8
2.7. Basic calculation of the cash book through
Symbols..............................................................8

Module 3: Maintaining Accounting Records..............................10

3.1. Cash Book.........................................................10
3.2. Simple Cash Book Entry........................................10
3.3. Inventory record.................................................11
3.4. Credit Book.......................................................12
3.5. Debtor Book......................................................12
3.6. Labor Book........................................................13
3.7. Entry Systems in Bookkeeping..............................13
3.8. The Balance Sheet.............................................15
3.9. Basic Understanding of Assets and Liabilities:.......16

Module 4: Calculating Profit and Loss....................................18
4.1. Profit.................................................................18
4.2. Income and Profit: . ............................................18
4.3. Loss.................................................................19
4.4. Expense and Loss..............................................19
4.5. Calculation Profit or Loss....................................19

Module 5: Managing Business Cash and Accounts......................20

5.1. Saving:..............................................................20
5.2. Advantage of saving.............................................20
5.3. Forms of Saving..................................................20
5.4. Advantages and Disadvantages of different
forms of saving....................................................20
5.5. Managing Credit.................................................21
5.6. Importance of Credit book:..................................22
5.7. Loan:................................................................22

Module 6: Financial and Marketing Management.......................23

6.1. Finance..............................................................23
6.2. Financial controls and system................................23
6.3. Sources of Finance:.............................................24
 6.4. What is marketing?.............................................24
6.5. Who are your customers?......................................25
6.6. What are my customer ’s needs and wants?.............25
6.7. How can I satisfy my customers’?...........................25

Annex 1................................................................................28
Group Activities in Module 1....................................................28

Annex 2................................................................................29
Group activities in Module 2....................................................29

Annex 3................................................................................31
Group activities in Module 3....................................................31

Annex 4................................................................................34
Group activities under Module 4..............................................34

Annex 5................................................................................35
Group activities in Module 5....................................................35

Annex 6................................................................................37
Group activities in Module 6....................................................37

LIST OF REFRENCES............................................................38
i

Preface
The United Nations Industrial Development Organization (UNIDO) is
implementing the European Union (EU) funded project on “Enhanced local
value addition and strengthening value chains” in the Greater Bahr El Ghazal
(GBEG) region of South Sudan. This project is part of the Zonal Effort for
Agricultural Transformation–Bahr El Ghazal Agricultural Development (ZEAT-
BEAD) programme funded by the EU and jointly implemented by FAO, UNOPS,
GIZ and UNIDO. The overall objective of the UNIDO component is to contribute
to the improvement of food security and income of the target beneficiaries in
the GBEG region by enhancing value addition and strengthening value chains.
Main emphasis is on developing and implementation of value chain upgrading
strategies and capacity building of actors operating in the identified value
chains in the GBEG region of South Sudan. UNIDO is focusing specifically on
small scale producers and private business owners to create a sustainable
and simple marketing network by developing and implementing upgrading
value chain strategies.

In addition, project is focusing on building technical and management capacity

of different actors involved in the identified value chains. The commodities
identified by UNIDO for upgrading value chains include sorghum, groundnut,
rice, fish and leather (hide and skin). UNIDO has established four agro
processing and training centers (APC) in the GBEG region with basic facility
for sorghum and groundnut processing and built capacity of farmers and
other stakeholders on post harvest management, storage and marketing
of agricultural produce. Basic equipment for rice mechanization like power
reaper, paddy thresher is being introduced at the Aweil Rice Scheme and a
small capacity rice mill has been installed in Aweil Town. In addition, two fish
processing centers are being established in the Lake State and fisher folks
have been trained on improved fish handling and preservation techniques.
UNIDO together with GIZ is planning to support four slaughter houses in the
GBEG region with improved facility for slaughtering, waste disposal as well
as production and marketing of quality hides and skins. The APCs, rice mill
and slaughter houses are being established under public-private-partnership
(PPP) mode in which the local government will be owner of the facility but it
will be operated and managed by private operators identified for the purpose.
At present, majority of the project stakeholders in the project target areas
have very limited knowledge on business and financial management skills.
Therefore, UNIDO planned to train at least 120 stakeholders in the target
areas on basic entrepreneurship and business management skills. The main
objective of the training programme is to equip participants with fundamental
knowledge on different aspects of business management, accounting, book
keeping and basic entrepreneurship skills.

This handbook is a technical documentation prepared by the United Nations

Industrial Development Organization under Zonal Effort for Agriculture
Transformation - Bahr El Ghazal Effort for Agriculture Development (ZEAT-
BEAD) Project with funding from the European Union. This manual aims to
develop and improve business management and entrepreneurship skills of the
target groups in the region. The manual covers six modules covering different
aspects of basic concepts of entrepreneurship, book keeping and financial
management as below:
 ii

Module 1: Basic entrepreneurship

(What is business? Who is an entrepreneur? Managing own business;
Making best use of time; Practicing business ethics; Forms of business;
Problems encountered by business owners)

Module II: Importance of book keeping

(Understanding importance of book keeping; Basic book keeping;
concepts and best practice in book keeping; Understanding income and
expenses; What is income and expenditure; Basic calculation and use of
symbol and drawings)

Module III: How to prepare and maintain accounting records

(What is cash book and how to write cash book; Various books to be kept
for proper record keeping of any business activities; Entry system in
bookkeeping; Importance of daily balancing of cash book and how to do
it; Basic understanding of assets and liabilities)

Module IV: How to calculate profit and loss

(Understanding difference between income and profit; Understanding
difference between expenditure and loss; Calculating income and
expenses and profit and loss)

Module V: Managing business cash and accounts

(Advantage and disadvantage of keeping savings in home, bank and
saving groups; Understanding credit management; Problems in buying
and selling on credit; Importance of keeping records of purchase and
sale on credit; Managing accounts, managing cash and credit/loan)

Module VI: Financial and marketing management

(Financial controls and system; Credit institutions and sources of finance;
Marketing concepts; marketing strategy; doing simple market research;
competitors analysis; marketing plan; promotion and advertising)

We sincerely hope that the handbook will be useful to the project

stakeholders and it will help improving financial and business management
skills of the project beneficiaries and other stakeholders.

Ram Kishore Prasad Singh Namal Samarakoon

Chief Technical Advisor Project Manager
iii

Acknowledgement
This manual has been developed by the Global Agriculture Innovation and Solutions
(GAIS) as part of the activities related to training on basic entrepreneurship and
business management skills, fundamental accounting and book keeping for the
stakeholders of the EU Project on Enhanced Value Addition and Strengthening Value
Chains in the Greater Bahr El Ghazal region, South Sudan. During development of
this handbook various documents produced by different agencies like Care, FAO
and UNIDO were referred to and adopted in the context of South Sudan.
This document would not have been possible without the valuable support from Mr.
Rahul Saharan, the CEO of GAIS, South Sudan.

Sincerest gratitude goes to Mr. Ram Kishore Prasad Singh, Chief Technical Advisor,
UNIDO, South Sudan for his technical guideline and support extended during
preparation of this manual.
Special recognition and sincere thanks are dues to the European Union and
the United Nations Industrial Development Organization (UNIDO) for financial
support and involving GAIS to implement training of project stakeholders on basic
entrepreneurship, business management skills, fundamental accounting and book
keeping in the Greater Bahr El Ghazal Region of South Sudan.
 1

Module

1
Basic Entrepreneurship

1.1. Introduction to Entrepreneurship to convert those opportunities into

a successful enterprise through
The word “Entrepreneurship” is derived creativity, innovation, risk-taking and
from the French verb entreprendre, progressive imagination” ...ILO Youth
which means, “to undertake.” The term Entrepreneurship Manual, 2009.
entrepreneurship thus refers to the
following: Entrepreneurship is a practice and
a process that results in creativity,
• The process of identifying opportunities innovation and enterprise development
in the marketplace, arranging the and growth. It refers to an individual’s
resources required to pursue these ability to turn ideas into action involving
opportunities and investing the resources and engaging in socially-useful wealth
to exploit the opportunities for long-term creation through the application of
gains. It involves creating wealth by
innovative thinking and execution to
bringing together resources in new ways
meet consumer needs, using one’s
to start and operate an enterprise.
own labor, time and ideas. Engaging
• The processes through which individuals in entrepreneurship shifts people from
become aware of business ownership then being “job seekers” to “job creators,”
develop ideas for and initiate a business. which is critical in countries that
have high levels of unemployment. It
• “The art of identifying viable business requires a lot of creativity, which is the
opportunities and mobilizing resources driving force behind innovation.

Think of a person who sits by the roadside leading to your home and who has
been selling the same type of food, from the same size of saucepan or pot, from
the same table top, and may not have been able to change their standard of living
to any appreciable extent. Such a person may be a businessperson but not an
entrepreneur. An entrepreneur is, therefore, a business-minded person who always
finds ways to improve and grow in business. An entrepreneur can also be defined
as a professional who discovers a business opportunity to produce improved or
new goods and services and identifies a way in which resources required can be
mobilized.
 2
Finally, an entrepreneur is someone higher quality products in the market
who constantly scans the environment thereby making more goods and
looking for changes that can provide services available to consumers.
opportunities for creating new growth- • Development of new markets.
oriented businesses. • Promotion of the use of
modern technology in small-scale
Entrepreneurs assume meaningful manufacturing to enhance higher
accountability for the risk and the productivity.
outcomes of new enterprises, ventures • Freedom from dependency on the
or business ideas. An effective and jobs offered by others.
successful entrepreneur shows • Possibility of achieving great
creativity and innovation in business accomplishments.
and is an example for other people. • There may be tax advantages.

An entrepreneur is an individual who: 1.3. Business

• Has the ability to identify and pursue Business is a set of regular activities
a business opportunity; conducted by an individual or a group
• Undertakes a business venture; of individuals to generate profit by
• Raises the capital to finance it; fulfilling the needs of other people. To
• Gathers the necessary physical, generate profit three primary activities
financial and human resources are carried out by businesses:
needed to operate the business
venture; • Buying (equipment and materials)
• Sets goals for him/herself and others; • Producing (goods or services)
• Initiates appropriate action to ensure • Selling (goods or services)
success; and
• Assumes all or major portion of the Business (also known as enterprise
risk! or firm) is an organization, which is
engaged in the trade of goods, services,
An entrepreneur is a job-creator, not or both to satisfy the consumers in
a job seeker. order to make a profit. Businesses are
An entrepreneur is a person who: predominant in capitalist economies,
where most of them are privately
• Has a dream. owned and administered to earn profit
• Has a vision. to increase the wealth of their owners.
• Is willing to take the risk Businesses may also be not-for-profit
• Makes something out of nothing or state-owned.

1.2. Benefits/importance of 1.4. Business Ownership

entrepreneurship
Ownership forms related to micro,
• Entrepreneurship allows one to small and medium enterprises are:
undertake different forms of self- • Sole proprietorship (owned by one
employment. person)
• Entrepreneurs are their own bosses • Partnership (owned by a few
giving them an opportunity to get more individuals, could be 2 to 20)
job satisfaction and flexibility of the • Co-operative (owned by a large
workforce. group)
• Encouragement of the processing of
local materials into finished goods for 1.4.1. Sole Proprietorship/ Sole Trader:
domestic consumption as well as for
export. In this form of ownership, the whole
• Healthy competition encourages business belongs to a single person.
 3
• The owner enjoys all the profits of the • All the members contribute an equal
business but also accepts all losses. amount towards the capital, share the
This single owner has complete freedom profits equally and have equal rights.
to manage the affairs of the business, as
he desires; he is answerable to nobody. • Since a significant number of owners
are involved, the management of the
• The owner ’s liability is unlimited. That co-operative is entrusted to a small
is in settling the debts of the business if group of members who are elected by
the business assets are insufficient, the the many.
personal assets will also be taken.
• The financial asset is crucial. The
• Being owned by a single person, the liability of the members is limited.
resources of the business are limited.
• That is even if the assets of the co-
1.4.2. Partnership operative are insufficient to satisfy the
debts, the members’ personal assets
Here, two or more persons join to start cannot be touched.
a business.
• A cooperative is also much stronger
• The owners collectively are called the than individuals or partnerships.
company, and individually, partners.
• A cooperative represents a large group
• The profits and losses are shared of people and, quite often, this gives its
by the partners in agreed proportions. access to Government programs and
Their liability towards the firm’s debts developmental agencies, which offer
is unlimited. financial assistance in the form of grants
or interest-free loans.
• Freedom of conducting the affairs of
the business is restricted as the partner A business owned by multiple individuals
is liable to the other partners. may be referred to as a company,
although that term also has a more
• Since more than one person is precise definition.
involved, the resources of the firm are
usually more. 1.5. The Importance of Practicing
Business Ethics
• A partnership could also be formed
to combine the resources required for Business ethics are not just designed for
the enterprise. Resources could include huge corporations and organizations.
elements, such as skills, money, land Whether a business employs thousands
and raw material. of workers or 10, business ethics
are an important aspect of any work
1.4.3. Cooperative and Group environment.
Ownership
A common ethical problem may
A cooperative is when people come have a significant impact on small
together to do business with a common business, as well as large corporations.
purpose and intent. Discrimination, prejudice, or disputes
between employers and employees all
• In a cooperative form of ownership, a have an impact on how well a business
large number of individuals collectively is likely to run. Developing a good,
own the enterprise and are involved in strong relationship between workers
its activities. The part owners are called and employers is essential in order
members to meet expectations, and to promote
consideration and the rights of all
parties involved.
 4
An employer pays a salary and benefits be able to manage different types of
to an employee who is expected to people - this includes those of various
perform a particular job or task. At age groups, religious, demographic,
the other end of the spectrum, an and cultural backgrounds.
organization or business manager
expects their employees to behave in a Sexual harassment is an undesirable
certain manner. Concepts such as virtue, behavior that makes someone feel
honesty and loyalty are rewarded, while uncomfortable at his or her place
dishonesty and deceit offer a fast track of work. It can be subtle or obvious.
to unemployment. In most cases, sexual harassment
typically involves the inappropriate
Both employers and employees expect to behavior of a supervisor over a lower
be treated fairly. Various issues involving ranking employee.
ethics crop up in small businesses as
well as large corporations. Such issues A hostile work environment is defined
may include but are not limited to: as a worker or employee who is
uncomfortable due to actions or
• Human resource issues comments relating to sex or sexuality
• Discrimination by another person in their place of
• Harassment work. However, does this mean that a
• Conflicts of interest male boss who puts his arms around
a female worker is harassing her? Not
Some examples of human resource necessarily. Sexual harassment in the
issues are those that occur where people workplace does not involve merely
work together in a small environment. physical gestures, but verbal remarks
It can include and impact such topics of a sexual nature.
as privacy, performance evaluation, the
hiring and firing process, discrimination Conflicts of interest occur at any point
and various types of harassment. in time when a person’s objectivity
or judgment may be compromised.
However, when it comes to such issues, The mere appearance of a conflict of
everyone expects to be treated fairly interest may prove devastating to a
which means being treated as an equal, company’s reputation even though
and with impartiality. For example, many nothing happened.
people might feel that responsibilities
or work is unbalanced if two people 1.6. Problems Faced by Business
perform the same task and only one
is rewarded. Discrimination is not just
Owners
about race. It is about religion, sex,
age, and culture. 1.6.1. Time Management:
Age discrimination is one of the most Time management can become
talked-about issues in the workplace problematic for the owner of a small
in the 21st century. Forced retirement, business. Small businesses often
layoffs, and termination with or without operate on an extremely tight budget,
severance pay affects older workers precluding the hiring of many employees.
more than any generation before. The owner is often faced with trying to
Because the baby boomer generation manage and grow the business while
is one of the largest in history, this at the same time having to do the daily
disparity is going to play a major role operation. Small business owners can
over the next decade. also find themselves so tied up in
running the business that they do not
It is important for business managers, take the time to enjoy families, hobbies
no matter how big or small business, to or other activities.
 5

1.6.2. Cost: 1.6.4. Employees Issues:

A study conducted by the National Small business owners often face a
Federation of Independent Business dilemma when it comes to hiring the
reported in 2008 that the primary workforce. Staffing enough workers
problem that business owners face to cover enough the business needs
is the cost of running the business. without destroying the business’s profit
The inability to control some costs, margin can be a tricky process. Things
including health insurance, energy are never easy for a small-business
bills and inflation, add stress to the owner. No matter how hard you try, there
business owner ’s bottom line. Besides, are always problems to solve and fires
the cost of paying employees, stocking to put out. At least you can take comfort
inventory and basic overhead can make in knowing you are not alone. Every
cash flow issues for the small business small-business owner goes through the
owner. same thing.

1.6.3. Inflexibility: 1.6.5. Obtaining Credit:

Refusing to let go of an idea and move Access to credit can be an issue for
on to something else is a common the small business owner, according to
problem for small business owners. the Washington Post. A business line of
For small business owners to succeed, credit can provide necessary cash flow
it is necessary for them to be willing to during the start-up months. It can also
think like an entrepreneur and explore ensure that the owner has the ability
many different ideas. Whether it is to expand the business with inventory
the need to replace inventory, provide and meet her payroll. A small business,
additional services or go to a new however, will not always qualify for a
location, a small business owner must large credit line, which can hinder the
remain flexible if he wants his small owner ’s ability to succeed.
business to succeed.
 6

Module

2
Importance of Bookkeeping
2.1. Book keeping
they owe you, and who your creditors
Many people do not write down how are and how much you owe them.
much money comes in and how much
money goes out of their business. This • You can keep records of money coming
is because they do not know how to do in and going out of group businesses
it, and they do not know that it can help or projects. This will prevent misuse
their business. Therefore, people do not of money and avoid mistrust among
know how much money they are earning, group members.
which customers have bought on credit
and how much stock they have bought • It can help you in the monitoring
on credit. and control of your stock levels,
knowing when to make a new
Where groups of people work together, order and how much to order.
lack of a proper bookkeeping system
often leads to mistrust and accusations • By comparing your actual record
between group members. with your planned budget, you can
determine if you are on the right track
Bookkeeping means that you write down during your business year.• You can
all the money that comes into your keep records of moneycoming in
business and all the money that goes and going out of group businesses
out of your business. or projects. This will prevent misuse
of money and avoid mistrust among
Bookkeeping is essential because you group members.
cannot keep everything in your head.
People are forgetful by nature. 2.3. Disadvantages of not keeping
2.2. Advantages of regular record- records or keeping poor records
keeping • You will not know how much money
you are earning, whether your business
• You will know how much money you is making a profit or losing money.
have received, how much you have
spent and how you spend it. • You will not know why you are making
a profit or losing money.
• You will know how much money you
have received, how much you have • You will not be able to make good
spent and how you spend it. decisions that will allow you to make
• You can calculate whether you are more money and save your business
making a profit or a loss and also know from losing money.
your break-even point.
• You can keep records of buying and • You will not know which customers
selling on credit. That is, you will know owe you money, how much they owe
who your debtors are and how much you or how much you owe someone
else.
 7
• Where groups of people work together, monetary and non-monetary consumption
lack of a proper record-keeping system ability, the former being used as a proxy
often leads to mistrust and accusations for total income.
between groups and members. Income is money that comes into your
business.
2.4. Importance of Bookkeeping
Explanation
The imperative of business records Money into your Business = Income
cannot be overemphasized. Every
serious entrepreneur must, as a How does Money come into your
matter of fact, be able to maintain
proper records of his or her business
Business?
transactions. Proper bookkeeping is
• By producing and selling goods
critical to sustaining and expanding a
• By purchase and sale of goods
business. Without it, the entrepreneur
runs the risk of hitting cash flow
• By giving a service (like a taxi driver
crunches, wasting money, and missing
who provides transportation)
out on opportunities to expand his
• By receiving gifts from friends or
business. When you maintain proper
family members
records of your business transactions,
• By getting a loan
you will be properly positioned to
• By inheritance
carry out formal business analysis
and see how your business is fairing.
Other Income Activities
The purpose of bookkeeping is to help
you manage your business and also • Producing and selling palm oil
to allow tax agencies to evaluate your • Drying and selling fish
business venture. As long as your • Producing and selling bread
bookkeeping achieves both of these • Thatch mats
objectives, you are in the right direction. • Producing and selling cassava
Any financial institution that wants to • Producing and selling rice
do business with you must request • Receiving donations.
your business records. Your ability to
make it means you are serious about 2.5.2. Expense:
your business.
An expense is money spent or cost
2.5. Income and Expanses incurred in an organization’s efforts to
generate revenue, representing the cost
of doing business. Expenses may be in
2.5.1. Income the form of actual cash payments (such as
wages and salaries), a computed expired
Income is the consumption and savings portion (depreciation) of an asset, or an
opportunity gained by an entity within a amount taken out of earnings (such as
specified time frame, which is typically bad debts). Expenses are summarized
expressed in monetary terms. However, and charged in the income statement
for households and individuals, “income as deductions from the income before
is the sum of all the wages, salaries, assessing the income tax. Whereas all
profits, interest payments, rents and expenses are costs, not all costs (such
other forms of earnings received in a as those incurred in the acquisition of
given period.” For firms, income refers revenue generating assets) are expenses.
to net-profit: what remains of revenue
after expenses have been subtracted.
In the field of public economics, it
How does Money go out of your Business?
may refer to the accumulation of both
• Materials or ingredients (like fish and
firewood for fish smoking, fabric for
 8
Dressmaking, flour for bread baking); 2.6. Basic calculations and use of
Services like: symbol and drawings
• Transport (taxi, bus)
• Market toll 2.6.1. Drawing of symbols:
- Electricity bills and rent payment
- Wages and salary payments Symbols are basically used when
some of the participants are illiterate
or unable to read and write. Each
Other Expense Activities symbol represents the cost head.
• Purchase of materials So, every symbol should be clearly
• Office supplies different from each other. Any symbol
• Payment for goods that participants find easy to draw
can be used as long as they will
2.5.3. Unnecessary Expenses remember it for calculation. It should
be a very simple drawing, so that it
Unnecessary expenses are expenses is easy for them to ‘write’ it in the
that people make out of temptation, but exercise books. They should keep
they are not necessary for sustaining the same symbol for the same thing
their business. People often forget about throughout for better understanding.
these expenses when they calculate Some examples are as follows:
their business expenses, and therefore
their income is less than they expected.

2.6.2. Symbols for ‘money in’ and 2.7. Basic calculation of the cash book
‘money out: through Symbols
Bookkeeping means that you write The book in which we write all the
down all the money that comes in and money that comes in and goes out
the money that goes out. The following is called a ‘cash book.’ You can
symbols will be used: also use an ordinary arithmetic
exercise book as a ‘cash book.’
• Money in: Money becomes more,
so we use the addition sign • All money that comes in is written
• Money out: Money becomes on the left page
less,so we use the subtraction sign • All money that goes out is written
on the right page
 9

Some sources of receiving money (Money •

•
School fees, school uniforms
Medicines, hospital bills
that comes in): • Food
• Income from sales • Cloth
• Gifts from husband, relatives or friends • Beauty-products (nail polish,
• Loans from banks, money lenders or pomade)
others • Hairdresser
• Collections from savings group • Ceremonies (funerals, weddings)
• Sweets, snacks, ice cream
Some sources of spending (Money • Church, fetish
that goes out)
• Buying of materials (fish, rice, seed)
• Firewood
• Transport (taxi, bus)
10
Module

3
Maintaining Accounting Records

3.1. Cash Book 3.2. Simple Cash Book Entry

A cash book is a financial journal Financial record keeping means that
that contains all cash receipts and you write down all the money that
payments, including bank deposits and comes in and the money that goes out.
withdrawals. Entries in the cash book
are then posted into the general ledger.

The following symbols are used:

money that goes out is written on the
• Money in = Money becomes more, so right page (RIGT)
we use the addition sign (+). All money
that comes in is written on the left page The book in which we write all the
(LEFT) money that comes in and goes
out is called a ‘Cash Book.’ You
• Money out = Money becomes less, so can use a standard arithmetic
we use the subtraction sign (-). All the exercise book as a ‘cash book.’
 11

3.3. Inventory record

An Inventory Record: keeps record of physical items that your business has at any
point in time. It includes what you had at the beginning of the year, what has been
added to those items through purchases and production and how much has left your
business through sales, consumption, planned use or losses.

Example of inventory record

12

3.4. Credit Book

A Credit Book: Keeps the record of all Mike Gaga Abe to be paid in 15 days.
the money the customers have to repay
for goods and services purchased on 2. March 15, 2017, credited 20 kg of
credit. Sorghum grinded costing SSP 360 to
Gatanga.
Example of inventory record 3. March 20, 2017, credited 40 kg of
Transactions for credit book Sorghum grinded costing SSP 720 to
Simon.
1. March 2, 2017, credited 50 kg of
Sorghum grinded costing SSP 900 to

Example of Credit Book

CUSTOMER CREDIT BOOK

3.5. Debtor Book Transactions

1. March 2, 2017, debited 50 Ltr of
A Debtor Book: Keep a record of all fuel costing SSP 1100 from Mike to be
whom the business owes (those who paid in 15 days.
have supplied goods and services to 2. March 15, 2017, debited servicing
the business on credit). costing SSP 800 from Simon.
3. March 20, 2017, debited 20 Ltr of
fuel costing SSP 440.

Example of Debtor Book

 13

3.6. Labor Book

A Labor Book: keeps a record of who March 12, 2017, Gatanga thrashed
had worked for you, how much they had Sorghum for Simon amounting to SSP
been employed (number of hours, days 500 for 2 days.
or quantity of work done), how much
they were paid and when they were March 23, 2017, Navura shelled
paid. groundnuts for Martin amounting to
SSP 600 for 3 days
Transactions for labor book
On March 2, 2017, Mike transported 100
Kg groundnuts for Simon amounting to
SSP 300 per trip.

3.7. Entry Systems in Bookkeeping Transactions

3.7.1. Single-Entry System (Journal) January 2, 2012, Received SSP 3,000
for sales of Groundnuts oil
The primary bookkeeping record
in single-entry bookkeeping is the January 14, 2012, Received SSP 6,000
cashbook, which is similar to a checking for milling service
account register but allocates the income
and expenses to various income and January 22, 2012, purchased office
expense accounts. Separate account supplies for SSP 1,000
records are maintained for petty cash,
accounts payable and receivable, and January 26, 2012, Pay for advertisement
other relevant transactions such as for SSP 300
inventory and travel expenses. Jan
uary 31, 2012, Bank charges amounting
to SSP 15

Table: Sample Revenue and Expense Journal for Single-Entry Bookkeeping

14

3.7.2. Double Entry System

Earlier transactions in the books of For example, suppose Mike paid cash
accounts were recorded under single salaries to his staff. The two accounts
entry system. The system had some affected are cash account and salaries
shortcomings, as there was not a account. As cash is going out of it, the
complete record of all the transactions. cash account is credited. Salaries are
Therefore, problems were faced while expenses for the business; salaries
preparing final accounts. Problems account is debited. Again Colletha
were also faced, as there was no self- bought raw material for the production
balancing method of accounting that unit, the two accounts involved are
could guarantee, to some extent, the Cash account and Purchases account.
accuracy of the books of accounts. She paid carriage to transport goods
So a need was felt for some uniformly to her factory; the two accounts
accepted system of accounting that involved are cash account and carriage
could help in the verification of the account. She sold finished goods to
accuracy of books to some extent. customers on credit; the two accounts
These problems were solved by the involved are the customer ’s personal
Double Entry System of Accounting. account (debtor) and sales account.
This system has totally replaced the She also purchased furniture for her
single entry system. This system is now office on credit. The two accounts
followed everywhere. Under this system involved are furniture account and
of accounting, every transaction in the personal account of the seller
business involves at least two accounts. (creditor). Thus we can see that every
That is why this method of accounting is transaction has two aspects in the
called the “Double Entry System” Under Double entry system of accountancy.
this system every transaction has two Now which account is debited and
aspects i.e. debit side and credit side. which is to be credited depends on
Under this system, every transaction the types of accounts involved and the
is entered into at least two accounts rules of debit and credit for this kind of
in the Ledger. In one, account, the account. The basic principle is that for
transaction is entered on the Left- every single transaction there are two
hand side i.e. on the debit portion of entries – one to a “giving account” and
the account, and the other account a corresponding one to a “receiving
entry for an equal amount is made on account.” In principle, it is said that
the Right-hand side of the account you Credit (Cr) the giving account and
i.e. the credit portion of the account. Debit (Dr) the receiving account.
 15

ASSETS = LIABILITIES + OWNER’S EQUITY

The equation is termed the fundamental worth of your business? This is a
accounting equation because these valuable tool to improve your business.
relationships are so essential to the
analysis and presentation of accounting 3.8.1. How is the Balance Sheet
information. The relationship between Structured?
the Income Statement or Profit & Loss
Account and the Balance Sheet is that There are two columns to a balance
profit increases an owner ’s equity, sheet. The first column lists what you
and a loss reduces it. The similar own, or your assets. This includes your
double entry effect is always on the cash on hand, accounts receivable and
ASSETS, increasing or reducing them. inventory. You will also need to include
prepaid and other expenses. You may
3.8. The Balance Sheet also have other assets such as a note
that will be due at a later date. In
A balance sheet is a financial report the right column, you would list your
that shows the financial picture of liabilities. These include loans that you
a company at a given time. Balance owe, accounts payable and taxes that
sheets are usually done monthly or you may owe. Both sides of the sheet
quarterly depending on the nature and are totaled, and the owners net worth
size of the business. The basic principle or investment is added to the liabilities
of the balance sheet is to show what side, and then that column is added
you own, what you owe and how much again. Both numbers on the sheet should
you have invested in your business. equal each other, hence the name
It gives you an idea of whether or balance sheet. If they do not, you know
not you can pay your creditors, how you have missed something and should
you manage your inventory and how go back through your accounts again.
you manage your billing. What is the

Table: Example of a Blank Balance Sheet

16

Table: Example of a Filled in Balance Sheet

3.8.2. Information Provided by the the Balance Sheet. Assets are shown
Balance Sheet at the netbook or net realizable value
(more on this later) but appreciated
The information on your balance sheet values are not considered.
can help a bank decide whether to
lend your business money or not. This Current Assets
is one point you would like to know, Current assets are those that mature
exactly what’s going on all the time in in less than one year. They are the
your business. You have a chance to sum of the following categories:
improve your company, thus making the • Cash
sheet more appealing to the bank. It • Accounts Receivable (A/R)
can show you if the financial position of • Inventory (Inv)
your company can handle hiring more • Prepaid Expenses
employees or giving the current ones • Other Current Assets
a raise. Moreover, if you ever wanted
to sell your business, the buyers would 3.9.2. Liabilities and Net Worth
like to see your balance sheets. Once
you have done the sheets for a year, you Liabilities and Net Worth are sources
can see how your business is growing or of cash listed in descending order
if the market is declining. You can see from the most nervous creditors and
if there are areas where you want to cut soonest to mature obligations (current
back or maybe spend more money. Just liabilities), to the least nervous and
by maintaining this one financial form, never due obligations (net worth).
you can have a wealth of information at There are two sources of funds: lender-
your fingertips. investor and owner-investor. Lender-
investors consist of trade suppliers,
3.9. Basic Understanding of Assets and employees, tax authorities and
Liabilities: financial institutions. Owner-investor
consists of stockholders and principals
3.9.1. Assets: who loan cash to the business. Both
lender-investor and owner-investors
As noted previously, anything of value have invested cash or its equivalent
that is owned or due to the business into the company. The only difference
is included under the Asset section of between the investors is the maturity
 17
date of their obligations and the way to keep these creditors happy is to
degree of their nervousness. maintain their obligations current.

Current liabilities: Current liabilities consist of the

Current liabilities are those following obligation accounts:
obligations that will mature and must
be paid within 12 months. These are • Accounts Payable - Trade (A/P)
liabilities that can create a company’s • Accrued Expenses
insolvency if cash is inadequate. A • Notes Payable - Bank (N/P Bank)
happy and satisfied set of current • Notes Payable - Other (N/P Other)
creditors is a healthy and important • Current Portion of Long-term Debt
source of credit for short-term uses
of cash (inventory and receivables). Proper matching of sources and uses
An unhappy and dissatisfied set of of funds requires that short-term
existing creditors can threaten the (current) liabilities must be used. Only
survival of the company. The best to purchase short-term assets (inventory
and receivables)
18

Module

4
Calculating Profit and Loss

4.1. Profit source of income for business. Profits

earned which are kept in the business
Profit is the investment gain or reward (i.e. not distributed to the owners
that entrepreneurs aim to get to reflect via dividends or other payments) are
the risk that they take. Profit is also known as Retained Profits.
an important signal to other providers
of funds to business. Banks, suppliers Retained profits are a major source of
and other lenders are more likely to income for any business, but especially
provide finance to a business that can start-ups or small businesses. The
demonstrate that it makes a profit (or is time a product is sold for more than
very likely to do so in the near future) it cost to produce it, then a profit is
and that it can settle debts as they earned, which can be reinvested.
become due. Profit is also an important

Profit can be measured and calculated. So here is the formula:

PROFIT = TOTAL SALES - TOTAL COST

Profit - means that there is more money coming in than there is going out.

4.2. Income and Profit: and are generally preceded by an

appropriate qualifying adjective or
Income and profit involve net or partially term such as “gross,” “operating,”
net concepts and refer to amounts “net Income or Profit before income
resulting from the deduction from taxes,” and “net.” The terms are also
revenues, or from operating revenues, used in titles of statements showing
of cost of goods sold, other expenses, results of operations, such as “income
and losses, or some of them. The statement” or “statement of profit and
terms are often used interchangeably loss,” or, sometimes, “profit and loss
account.”
 19
The term gross income is often used property. These distinctions seem
as the equivalent of revenue; in generally useful, and indicate that the
public utility practice it is commonly narrower use of the term expense refers
used in referring to net income before to such items as operating, selling or
deducting interest and other income administrative expenses, interest, and
charges. The term gross profit is taxes.
frequently used to describe operating
revenue less the cost of goods Loss is the excess of all expenses,
sold. The terms operating income or in the broad sense of that word, over
operating profit are generally used revenues for a period, or the excess of
to denote “gross profit” less ordinary all or the appropriate portion of the cost
expenses. The terms net income or net of assets over related proceeds, if any,
profit refer to the results of operations when the items are sold, abandoned, or
after deducting from revenues all either wholly or partially destroyed by
related costs and expenses and all casualty or otherwise written off. When
other charges and losses assigned losses such as those described above
to the period. These deductions do are deducted from revenues, they are
not include dividends or comparable expenses in the broad sense of that
withdrawals. term.

4.3. Loss 4.5. Calculation Profit or Loss

The loss means that you spend more a) Include the title and period. When
money on producing or buying your creating a profit and loss statement,
products than the money you earn by the document is titled at the top of the
selling the goods. page with “Profit & Loss Statement.”
Under the title, include the period of
4.4. Expense and Loss time that the statement covers. Profit
and loss statement normally covers one
Expense in its broadest sense includes month, one quarter or one year. This
all expired costs which are deductible is written using words such as “For
from revenues. In income statements, the Month Ending January 31, 2011.”
distinctions are often made between
various types of expired costs by b) Record all business transactions.
captions or titles including such terms Profit and loss statement should not
as cost, expense, or loss, e.g., cost be created until all transactions for
of goods or services sold, operating the period have been recorded and
expenses, selling and administrative posted to the appropriate accounts
expenses, and loss on sale of in the company’s general ledger.
20

Module

5
Managing Business Cash and Accounts

5.1. Saving: • To safely store surplus

• To acquire skills for proper money
Savings are money or other assets kept management and self-discipline
over a period of time, usually not to be • To qualify for certain types of loans
consumed immediately but in the future.
Savings can be kept in a bank or any 5.3. Forms of Saving
other safe place where there is no risk
of loss, spending, or making the profit. • Informal saving: Savings
societies, village banking
Savings can be done through
• Small but regular deposits – this • Traditional forms of saving:
happen when someone has decided to Buying assets (e.g. houses,
sacrifice current consumption (use of animals, artworks), holding cash in
assets, e.g. of money and goods) in order pots, or mattresses.
to increase the availability of assets
for future consumption. It, therefore, • Formal savings: Bank savings
involves postponing expenditures in a account; savings account with micro-
view to accumulating a sizeable amount finance institutions.
of resources for future use.

• Automatic deductions from salaries,

5.4. Advantages and Disadvantages
wages or income - this type of saving
of different forms of saving
is not voluntary. It is a system used by
most employers under the labor law.
5.4.1. At home:
5.2. Advantage of saving Advantages:
• You do not have to travel.
• To provide for specific needs in the
• Don’t have to follow procedure to
future
withdraw money
• To have access to monetary or other
• Can be used at any point of time
assets whenever needed
• To ensure financial independence
• To make one’s resources
Disadvantages:
inaccessible for others without
• You are tempted to use the money;
one’s approval
• It may not be safe.
 21

5.4.2. At the bank: • There may be quarrels over

repayment;
Advantages:
• The money is safe; • Selling small items on credit to people
• You will get interest on the money. (1 bread, 2 bottles of soft drinks),
easily adds to a lot of money, which
Disadvantages: makes it difficult for you to remember
• You may have to travel; who should repay you and how much
• Banks are formal institutions, which money;
may discourage people.
• The money that your customers still
5.4.3. With a savings group: have to repay cannot be used to buy
materials or improve your business.
Advantages: Therefore it is best not to sell on credit
• You do not have to travel; at all. However, if you have to sell on
• You are encouraged by other group- credit, keep the following rules:
members to save.
• Only sell on credit to regular
Disadvantage: customers who you are sure will pay
• The money-collector may not always you back on time;
be reliable.
• Demand payment of part of the
5.5. Managing Credit amount;

Buying and selling on credit are very • Always keep sufficient cash to buy
popular. It can be rewarding, but it new stock;
can also be very risky as people do
not always remember who owes them • Maintain records of the people
money and to whom they owe money to whom you sell on credit.
and how much. Some people may only
pay after a long time or not pay at all. 5.5.2. Buying on credit:
Understanding how to manage credit will
help you control your business better. Buying on credit may help you in your
business in the following cases:
5.5.1. Selling on credit
• To buy stock in a season when it is
The main advantage of selling on credit cheap (like local example), preserve
is that it is a service to your customers, and store it and sell it when the prices
and will attract some customers. are high;
However, there are more disadvantages
than advantages to selling on credit: • To enable you to buy cheaper in
bulk (like flour);
• Your clients may delay in repaying,
or may not repay you at all; • To cover high seasonal expenses
(like plowing).
22
In these cases, buying on time. Typically, the money is paid
credit may give you more profit. off in regular installments, or partial
repayments; in an annuity, each
5.5.3. The disadvantages of buying installment is the same amount.
on credit are:
The loan is usually provided at a cost,
• There may be quarrels over repayment; referred to as interest on the debt,
• You may forget about it; which provides an incentive for the
• There is the tendency to buy lender to engage in the loan. In a legal
unnecessary things; loan, each of these obligations and
• Sometimes you have to pay more when restrictions is enforced by contract,
you buy on credit (interest). which can also put the borrower
If you decide to buy on credit, be sure under additional restrictions known
that you will be able to repay your credit as loan covenants. Although this
on time. Before buying on credit find out article focuses on financial loans, in
how much profit you will make with your practice any material object might be
business. The profit should be enough to lent. Acting as a provider of loans is
repay your credit, and still leave some one of the principal tasks for financial
money for savings. institutions. For other institutions,
issuing of debt contracts such as
5.6. Importance of Credit book: bonds is a regular source of funding.

The credit book keeps the record of all the 5.7.1. Advantages
money that customers have to repay you and
all the money you have to repay to others. • A bank loan can be secured
quickly; in less than an hour, a
You can keep two credit books; one for the qualified borrower can complete a
goods that you have sold on credit, and bank loan transaction.
one of the goods that you bought on credit. • A bank loan can be used in many
Alternatively: you can use the first part of ways; money can be borrowed for many
an exercise book for ‘sold on credit,’ and large-ticket items, such as furniture,
the second part for the “bought on credit.” vehicles or home renovations.

5.7. Loan: 5.7.2. Disadvantages

A loan is a type of debt. Like all • Some loans carry a prepayment
debt instruments, a loan entails the penalty, preventing the borrower
redistribution of financial assets over time, from paying the note off early without
between the lender and the borrower. incurring additional cost.
• There are a number of limitations
In a loan, the borrower initially receives on the transaction. Good credit
or borrows a sum of money, called is usually required to borrow
the principal, from the lender, and is money, and there are stipulations
obligated to pay back or repay an equal on how the money can be used.
amount of money to the lender at a later
 23
Module

6
Financial and Marketing Management

6.1. Finance differ with each organisation however

following core areas can be covered:
Finance is the study of how investors
allocate their assets over time under • Budgets: By having a budget in
conditions of certainty and uncertainty. place at the beginning of the year you
A key factor in finance, which affects can access performance and be able
decisions, is the time value of money, to identify overspends.
which states that a unit of currency today
is worth more than a unit of currency • Bank Mandate: You need effective
tomorrow. Finance measures the risks controls over who has authority to
vs. profits and gives an indication of make payments of the bank account,
whether the investment is good or not. the level of authority and rules over
• Management control (as exercised cheque signatories.
in planning, performance evaluation,
and coordination) of financial activities • Expenditure Authorisation: You
aims to achieve the desired return on need to ensure that people have
investment. sufficient authorisation to spend the
• Managers use financial statements (a organisations resources.
budget being the main one), operating
ratios, and other financial tools to • Salaries: This can be a significant
exercise financial control. area of fraud without strong financial
controls in place over new staff,
6.2. Financial controls and system leavers, changes to salaries and who
calculates and pays the salaries.
Financial controls are the means by
which an organization’s resources are • Petty Cash: As this is physical cash
directed, monitored, and measured. it is easy for money to go missing, it is
Financial controls play an important role essential to maintain good records and
in ensuring the accuracy of reporting, ensure it is reconciled regularly.
eliminating fraud and protecting the
organization’s resources, both physical • Cash Income: If you receive lots of
and intangible. These internal control cash there are risks that not all of it
procedures reduce process variation, will be deposited in the bank therefore
leading to more predictable outcomes. controls need to be put in place over
The types of financial controls in place who counts, banks and records it.
24
• Bank Reconciliation: This is an Microfinance institutions and NGOs
important process for any organisation providing grants for small businesses
to go through to ensure that the amount often demand a personal contribution
in the bank account agrees with what of funds from the entrepreneur to
you expect there to be. supplement a loan or a grant.

• Confidential information: You need

6.3.2. Loans
to ensure you know what information
is confidential, how long you are
Entrepreneurs with a convincing
supposed to keep it and that it is fill
business idea and a good plan of
away correctly.
activities illustrating its potential
profitability may qualify for a loan
6.3. Sources of Finance: from a financial institution. Often,
6.3.1. Own funds however, loans are granted only if
the entrepreneur has some collateral
(e.g. is the owner of a house).
Many starting entrepreneurs have
saved money for quite a while to be
Entrepreneurs who use loans to start
able to start their business. Some sell
their business must add the respective
assets such as land or livestock. Using
costs – i.e. interest payments and
their own funds creates independence.
reimbursement of the principal – to
Entrepreneurs should cultivate a
all their calculations. For starting
culture of saving money, which will
entrepreneurs with limited means and
allow them to make future investments
no collateral, loans are usually not
unassisted. One way of increasing
accessible.
one’s own funds is to team up with one
Entrepreneurs who have a seasoned
or more partners who can pump money
business and can illustrate their
into the business.
financial viability and profitability have
a better chance of obtaining a loan. This
However, this requires careful
is another reason for entrepreneurs to
consideration, as the business needs
keep records and properly document
to generate enough profit to provide a
the profitability of their business
return to all those who invested in it.
Entrepreneurs investing their own
funds in their business also send 6.4. What is marketing?
out a message to third parties. They
show that they believe in the business Marketing is the effort to identify and
and that they are ready to risk their satisfy customers’ needs and wants. It
own money to run it they show involves finding out who your customers
commitment. Showing this type of are, what they need and want, the prices,
commitment can prove crucial when the level of competition. It involves the
they decide to apply for funds from a knowledge and all the processes you
financial institution like a microcredit undertake to sell your product.
Institute, a bank or moneylenders.
 25

Marketing answers the following • Products/services your customers want.

• Price your customers are willing to
questions: pay.
• Who are my customers? • Location of your business in order to
• What are my customer ’s needs reach your customers (Place).
and wants? • Promotion to use to inform your
• How can I satisfy my customers’? customers and attract them to buy your
• How do I make a profit as I satisfy products or services.
my clients?

6.5. Who are your customers? 6.7.1. PRODUCT

Your customers are the people or other Product refers to goods/services
businesses that want your products/ produced for sale, the product /service
services and are willing to pay for should relate to the needs and wants of
them. They include: the customers. Some important questions
you need to ask yourself include:
• People who are buying from you
now. • What products/services do I sell?
• People you hope will buy from you • Why did I decide to sell these
in the future. products?
• People who stopped buying from • Do I have the products customers
you but you hope to get them back. want?
• Do any of my products not sell well?
• Do I stock products that do not sell well?
6.6. What are my customer’s needs
and wants? Always listen to what your customers
like and don’t like. When their needs
An Important point to note is that change, change your products and
customers want to look at different services to satisfy the new requirements.
products so that they can choose what Do more market research in order
they like best. Some customers want a to provide those goods and services
different design and others want high and increase your sales. If your
quality and are willing to pay extra for product is not selling well, think of
that. new ideas like finding new customers.

6.7. How can I satisfy my customers’? 6.7.2. PRICING

Pricing refers to the process of
You need to do everything to find out
setting a price for a product/service.
who your customers are and what
Your prices must be low enough to
they need and want in order to satisfy
attract customers to buy and high
them improves your sales and makes a
enough to earn your business profit.
profit. You need to find out:
26
To set your price, you need to: • Ensure you maintain attractive
• Know your costs. displays.
• Know how much customers are willing • Let customers try new products.
to pay. • Have competitions
• Know your competitor ’s price. • Give demonstrations
• Know how to make your prices more • Sell complementary products
attractive (products that go together)

6.7.3. PLACE 6.7.5. MARKET RESEARCH

Place means the different ways of
Before starting a business, it is
getting your products or services to
important to know the market
your customers. It is also referred to
conditions, in which the business will
as distribution. If your business is not
be operating: What are the customer
located near your clients, you must find
needs? Who is the competition? What
ways to get your products/services to
are the prices at which products and
where it is easy for customers to buy.
services are sold? These are only
You can distribute your products to
some of the questions that need to
your customers through:
be clarified before starting. So, after
• Selling directly to the consumers of
having come up with a brilliant idea,
the products.
you need to check if it can work in the
• Retail distribution and wholesale
market. You need to carry out a market
distribution.
survey. The main focus of this activity
is to find out as much as possible
6.7.4. PROMOTION about your potential customer ’s
buying habits and competition
Promotion means informing your
customers of your products and • What do they buy?
services and attracting them to buy • Where do they buy?
them. Promotion includes advertising, • Why do they buy from XY?
sales promotion, publicity and personal • When do they buy?
selling. • How much do they buy?
Use advertising to make customers • Which price do they pay?
more interested in buying your products • What are their preferences?
or services. Some useful ways of • Do they get any extras?
advertising include signs, boards,
posters, handouts, business cards,
The Marketing Process
price lists, photos and newspapers.
Market research is the gathering of
You can use sales promotion to make
information that ties a small enterprise
customers buy more when they come
to its customers. It provides the
to your business, and you could also:
information that is necessary for
companies to correctly position
their product in the marketplace and
 27
offer the best combination of product, above data. It is often conducted
price, place/distribution, promotion, and as the first step in identifying the
person. feasibility of an enterprise idea.
It always incorporates some form
Well-designed market research gives of data collection and is either
a person an edge on their competition, secondary research (often referred
reduces their risk, and improves to as desk research) or primary
the effectiveness of their enterprise research (direct from an individual).
activities. Quality market research is the
key to success for the small entrepreneur.
How to conduct market research
If a person does not understand their
customer and their needs they will likely Talk to potential competitors to find
fail in their enterprise. out:
Why Conduct Market Research? • Their products or services (for
example quality and design)
• To develop product, price, promotion, • What prices they charge
place/distribution, and people plans • What exactly they sell
• To identify problems in their • How their product/services differ
marketplace and discover new from yours
opportunities • Where they get their inputs?
• To learn about competitors and how • Where do they sell?
they are marketing their products. • How they promote their product/
• To find out what consumers think about service
their product category • Any particular approaches to
• To gauge the performance of existing customer care
products • How you can compete
Market research involves the systematic,
objective collection and analysis of the
28

Annex 1
Group Activities in Module 1
• What do you think a business is?
• What type of business do you do?
• What problems do you encounter within your own business?
• Ask participants to list all the things and resources that are found
in business. This may include people, machinery, stationery, etc.

Ask participants to provide in a table format the advantages and disadvantages of

the type of business they are managing or would like to start.
 29

Annex 2
Group activities in Module 2
• How do you remember how much money comes in and goes out?
• What happens if you forget something?
• How do you think bookkeeping could help your business?
• What do you think bookkeeping means?

ROLE-PLAYS
Tell the participants that you would like them to perform a role-play, as it will help
them to understand what this lesson is about. Divide the class into three groups.
Read the themes to each group.

Theme for group 1:

A woman has a business (choose a business that is familiar to your participants).
She does not write down how much money comes in and goes out. One day her
son comes home from school with a letter from the headmaster. The school has
increased the school fees, and it has to be paid immediately.
The woman gets anxious. She knows she has no money. She desperately tries to
remember how much money she received in the past week and how she spent it.

Theme for group 2:

A carpenter has sold a cupboard for SSP 15,000 to a customer. When the customer
collected the cupboard, he told the carpenter that he did not have money at that
moment, but he promised to pay at the end of the month.
At the end of the month, the carpenter tries to get his money. The customer tells
him that he only owes him SSP 13,000, and he will not pay him more than that! A
furious discussion between the two persons follows. However, the carpenter has no
proof that he has sold the cupboard on credit for SSP 15,000 and he has to accept
the SSP 13,000.

Theme for group 3:

A group of women in your village has a bakery. They have divided the tasks as
following:
• One person always buys the ingredients for the bread and the firewood;
• One person is responsible for selling the bread;
• All the other members of the group assist in kneading the dough and baking the
bread;
• The treasurer of the group is responsible for keeping the money safe.
The sales woman does not write down how much money comes in. Whenever there is
30
cash, she gives it to the treasurer of the group, who keeps it in a cash box. The treasurer,
in turn, provides money to the person who buys the ingredients and the firewood.
The treasurer is a very reliable person, but she does not know how to read and write.

At the end of the month, the group wants to know how much money they have
made by selling bread. When they open the cash box, they find out that there
is less money than they expected. Nobody knows what happened to the
money. After a discussion, they accuse the sales woman of stealing money.

After performing each role-play ask the participants a question:

• Play 1: What is the woman’s problem? What could she have done to avoid this
problem?
• Play 2: Why was the carpenter cheated?
• Play 3: Why were the group members angry? What could they have done to avoid
this problem?
 31

Annex 3
Group activities in Module 3
- Can you mention three sources from which you receive
money? Also, three things on which you spend money?

- If bookkeeping means that you write down all the money that comes in and goes
out, how would you do it?
Invite some of the participants to come to the chalkboard and make a very simple
drawing of the following:

• Money
• Fish
• Food
• Transport
• Firewood

Practice; Exercise in Pairs

• The participants should sit together in pairs of two and do an exercise. They
should take their exercise books and write the symbol for ‘money in’ on the left page
and the symbol for ‘money out’ on the right page.
• Each pair should choose a business that is familiar to them. They should discuss
the expenditure involved in making and selling their product (or giving their service).
They should draw symbols of the items that bring in money on the left page, and
symbols of the items on which they spend money on the right page.
• When everybody has finished, ask some of the participants to draw a cashbook
on the chalkboard, explain the outcome of their discussion, and write the symbols
in the cashbook on the chalkboard.

Example 1:
Read the following example to the group.

A women’s group is running a poultry project. They buy chicks and feed
them until they are mature. The chicken food can easily be purchased in
the village. Sometimes chickens get sick, and they have to buy medicines.

The chickens are sold on market days in town, about 15 kilometers from
their village. They always take the bus to get there. In town, they pay
a porter for carrying the chickens from the bus station to the market.

At the end of the day, all the chickens are sold.

Draw a cashbook on the chalkboard. Tell the story again, item by item. Let the
32
participants tell you which actions bring in money and which actions need money.
Ask individual participants to draw the appropriate symbols in the correct columns
on the chalkboa
Have a discussion on the following question to make your participants aware of the
importance of wages:
• Which of the following group members in the poultry project should be paid for
their work?
- The members who feed the chickens and clean the chicken house?
- The members who sell the chickens in town?
- The members who are part of the group but do not do any work in the project?
• What is income?
• What is expenditure?

Example 2
Brainstorm with the participants on the following questions, or choose other examples
of businesses that are more familiar to your participants:
• What are the incomes and the expenditure concerned with operating a bakery?
• What are the incomes and the expenditure involved in buying and selling soft drinks?

PRACTICE

Before starting the exercises ask all participants to draw the lines in the exercise
book. Make sure ‘money in’ is on the left side and ‘money out’ on the right side, and
that each page is correctly divided into the three columns. At least four pages.

Exercise 1: plenary discussion

Ask a participant to draw a cashbook on the chalkboard. Ask individual
participants to write the details of the following exercise in the cashbook.

• Choose a business that you know well:

- Start with writing an amount of cash on the ‘money in’ side;

- Discuss the process:

- What materials do you usually buy;
- What services do you pay for;
- What wages do you pay;
- How much do you spend on replacements and repair;
- How much do you sell your goods for;
- Write the income and expenditure in the cash book on the chalkboard
- (Using symbols);
- Add up both columns and find out how much cash is left.

• Ask participants to copy the example from the chalkboard in their exercise books.
 33

Exercise 2: exercise in pairs

Divide the group into pairs. Each pair is to do the following exercise. Read the
exercise. Repeat it item by item and write the dates, symbols and amounts on the
chalkboard as shown on the next page.
Amina sells groceries (like tea and matches) from a kiosk at the roadside.

• On 5-7-1993 she has SSP 6000 cash in hand.

• She goes to town and buys the following items:
- 5 tins of sardines for SSP 400 each; 5 x SSP 400 = SSP 2000
- 4 packs of matches at SSP 200 = SSP 800
- Bananas for SSP 1200
- She pays SSP 200 for transport
• On 6-7-1993 she sells the following items:
- 2 tins of sardines at SSP 450 each; 2 x SSP 450 = SSP 900
- 1 pack of matches at SSP 250
- And bananas for SSP 700
• She takes SSP 400 from the business money to go to the market to buy foodstuffs
for her.
34

Annex 4
Group activities under Module 4
GROUP EXERCISES

Divide the participants into small groups of three persons. Read the exercises to the
participants and write the details on the chalkboard as shown below.
The participants should copy the details in their exercise books and do the exercises
in their small groups.

Exercise 1

Mary buys two baskets of fresh fish for SSP 3500 each, smokes it and sells it for
SSP 6000 each on 20-3-2017.
• Write down all the amounts of money Mary has had to spend before selling the two
baskets of fish. Calculate the total money out.
• What will Mary’s income be when she sells the two baskets of smoked fish for SSP
6000
• How much profit does Mary make when she sells the fish for SSP 6000?
• How could Mary have made more profit?

Exercise 2
Joyce sells doughnuts. She buys the following ingredients:
• Flour SSP 600
• Sugar SSP 350
• Yeast SSP100
• Oil SSP 1500
• She pays SSP100 for transport
• She also buys charcoal for SSP 200

On 25-3-2017 she bakes 80 doughnuts. She sells 60 doughnuts at SSP 50 each (60
x SSP 50 =SSP 3000). She gives 20 doughnuts to her children and some friends.
Note: Joyce does not use all the oil; about one-third of the bottle is left over, worth
SSP 500. When calculating the profit the leftover oil should not be included, as she
can still use it another time.

• How much money did Joyce spend to fry 80 doughnuts?

• How much money did she receive by selling 60 doughnuts?
• Did she make a profit or a loss?
• How could she have made more profit?

(Stress that she has given away some of the doughnuts)

 35

Annex 5
Group activities in Module 5
Practice: Role - Plays

Divide the participants into groups of 5 persons. Give each group the following
questions to answer:

• Choose a business that is familiar to you. What do you want to use your profit for?
• What are the things you would want to save money for?
• How would you save the money?
- At home? At a bank? With a savings group? Otherwise? Give reasons why.
After the discussions ask each group to present the outcome of the discussion in
the form of a role-play.

Practice: Small Group Discussions

Divide the participants into small groups of three to four persons.

Let each group think of business whereby it is common to buy or sell on credit.
They should try to think of the advantages and disadvantages of buying and/or
selling on credit in this particular business.

After the discussions, one person of each small group should present their case to
the other participants.

Exercise 1: Maintaining Credit book

Draw a ‘sold on credit’ book on the chalkboard. Read the following story and write
the details as shown below in the credit book. Ask participants to come to the
chalkboard and write the amounts in the correct columns.
Lucy is a farmer. She sells tomatoes and onions. She has a regular customer. Her
name is Regina.

• On 1-7-2016 Aba sells tomatoes for SSP 5000 and onions for SSP 4000 to Regina
on credit. Regina promises to pay on the next market day.
• On 7-7-2016 Regina pays Lucy SSP 7000.
• On the same day, she buys tomatoes for SSP 2000 on credit again.
After writing the exercise on the chalkboard, the participants should copy it in their
exercise books.

Exercise 2
Draw a ‘bought on credit’ book on the chalkboard. Read the following story and let
the participants write the details in the credit book on the chalkboard.
Amina is a baker. She often buys bags of flour on credit from the wholesale
36
shop. The name of the shop is ‘Okay store.’ She always writes everything
she buys on credit in her credit book, so that she cannot forget anything.

• On 15-2-2016 Amina buys 2 bags of flour of SSP15, 000 each. She pays cash for
only one bag and agrees to pay the remaining SSP15, 000 in two weeks time.
• On 25-2-2016 she pays SSP 15,000.
• On 25-2-2016 she buys another 2 bags of flour on credit at SSP15, 000 each (2 x
SSP 15,000 =SSP 30,000)
After writing the exercise on the chalkboard, the participants should copy it in their
exercise books.
 37

Annex 6
Group activities in Module 6
Practice: Role-Plays

Divide the participants into two groups. Each group is to perform a role-play. Each role-
plays should highlight some of the issues that they have learned in the previous lessons.

Group 1
Choose a business that is familiar to you. Prepare a role to play on an awful
businesswoman. Some ideas that you could include in your role-play are:
• Her prices are very high;
• Her place is far from the village;
• Her products are often not ready in time;
• Her products are of bad quality;
• She is unfriendly to customers;
• She does not keep records of income and expenditure.

Group 2
Take somebody in mind whom you consider being a very good businesswoman.
Think of what makes her a good businesswoman and prepare a role-play on that.
Some ideas for your role-play are:

• The product is what people need and are prepared to pay for;
• She produces good quality and in time;
• She gives good service to customers;
• She keeps records of her income and expenditure in a cash book;
38

LIST OF REFRENCES

• International Labour Office, A Guide for Starting

Income-Generating Activities, Chapter 6 Management,
ILO-Rehabilitation staff Training and Research
Programme for Africa, Harare, Zimbabwe

• Management Development and Productivity Institute,

Handouts on In-plant Course in Business and Financial
Management for Women’s World Banking Ghana Ltd.,
Accra, Ghana, 1992

• Harper, Malcolm and Kraus Harper, Uschi; Getting Down

to Business, a Manual for Training Businesswomen,
Intermediate Technology Publications, London, U.K.,
1988

• Tempelman, Diana, Food and Agriculture Organization,

Figures for Bookkeeping and Facilitator ’s Guide for
Figures for Bookkeeping, test-edition, Accra, Ghana,
1991.

• Basic Skills Unit, Number Themes and Skills, published

by Careers and Occupational Information Centre,
Sheffield, U.K„ 1984

• Kane, Kevin and staff of Tototo Home Industries,

Faidika, Business Training for Women’s Groups, the
Tototo Way, Mombasa, Kenia, 1990

• Bureau of Ghana Languages and Department of

Community Development, Facilitator ’s Handbook to
the Primer and Reader on Improving Health through
Functional Literacy, Accra Ghana, 1990

• International Labour Office, Improve Your

Business, Handbook, Geneva, Switzerland, 1988
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