Why Businesses Collapse in Ghana
Starting and running a business in Ghana—or anywhere in the world—requires more than just passion and a great product or service. One of the most underestimated yet powerful tools for sustainability and growth is proper record keeping.
Many entrepreneurs think they are keeping records when in reality, what they have are incomplete, disorganized, or invalid logs that cannot serve their business in times of audit, funding, or crisis. The distinction between records and proper records could be the difference between a thriving business and one that collapses.
What Are Proper Records?
Let’s clarify this:
Records: These can be any documentation—receipts, notes, or files—that capture aspects of your business operations. They may be informal and lack consistency.
Proper Records: These are structured, accurate, up-to-date, and verifiable documents. They follow accounting or regulatory standards and can withstand scrutiny from auditors, banks, tax authorities, or investors.
Examples of proper records include:
Duly issued receipts and invoices
Bank statements reconciled with financial entries
Payroll documentation
Tax filings
Asset registers
Loan agreements and repayment schedules
Real-Life Lessons from Ghana
1. The Case of Noble Dream Microfinance Limited
A KNUST study reviewed the collapse of Noble Dream Microfinance Limited and revealed that the company did not maintain proper prudential reports or adhere to credit administration policies. This hindered the Bank of Ghana’s ability to intervene early. While they likely had some form of records, these were either incomplete or not in line with regulatory requirements—highlighting the danger of having records that are not “proper.”
Source: KNUST Thesis – ir.knust.edu.gh
2. Collapse of 347 Microfinance Institutions
In 2019, the Bank of Ghana revoked the licenses of 347 microfinance companies. Of these, 35 companies had no accessible records, making it difficult for the Receiver to validate GH₵252 million worth of depositor claims. In other cases, available records were inadequate or invalid, highlighting the widespread failure of proper record keeping.
Source: Graphic Online
These are not just stories; they are cautionary tales that affect livelihoods, jobs, and investor confidence.
Where Can You Get Guidance on Proper Business Records in Ghana?
If you’re starting or already running a business, the following institutions can provide vital information, support, and regulation regarding proper documentation and business operations:
1. Registrar General’s Department (RGD)
For business registration, incorporation documents, and renewals
2. Ghana Revenue Authority (GRA)
To obtain a TIN, register for VAT, and learn how to file taxes
Provides guides on bookkeeping for tax compliance
3. Ghana Enterprises Agency (GEA)
Offers training on bookkeeping, financial literacy, and SME management
Formerly NBSSI
4. Ghana Standards Authority (GSA)
Helps you meet product and operational standards, including documentation requirements
5. Business Advisory Centres (BACs) in Your District
Provide one-on-one business coaching and help you set up record keeping systems tailored to your business type
6. Professional Associations and Accountants
Consider joining industry associations or hiring a certified accountant for regular guidance on documentation and compliance
Final Thoughts
Proper record keeping is not a luxury; it is a lifeline for your business. It’s what helps you:
Know your financial health
Secure funding
Pay accurate taxes
Avoid legal trouble
Make informed business decisions
Don’t wait until your business is in trouble to take record keeping seriously. Learn from the past—not having proper records is a risk you cannot afford.
