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BUSINESS DOCUMENTATION IN SMEs AND ITS TAX IMPLICATION

Awoyemi Sequel to our last edition, we shall be looking at business documentation, recording, filling and related processes for SME’s in this issue. Typically an average SMEs can make use of either electronic or/and manual documentation to record and document her business or project. The combination of the two (manual and electronic) are common to growing organizations, majority of the new and some existing and sizeable organization adopt manual. LACK OF PROPER DOCUMENTATION OR MISREPRESENTATION While an entire industry has grown up around Business Process Management (BPM) as a field of endeavor; little progress has been made among SMEs and this has largely exposed or disqualified them in many ways. A proper narration of business activities with use of standard forms or template is a prerequisite to business documentation and reporting. Every business ventures is expected to provide adequate information for correct description of their endeavors not only for the present but more importantly for the future needs.  OBJECTIVE OF BUSINESS DOCUMENTATION This is basically to provide written evidence for past transactions, future commitments and enable effective reviews for the needful.
  • Meeting a Critical Need A common need among organizations is the ability to describe their processes in a way that their stakeholders will quickly understand. The primary tool for describing business processes is the business process specification. This important document may be called by other names, depending on industry or specific organization, but a document that accurately explains how a process works is a critical need for all organizations.
ORGANIZATIONS MUST CREATE THEIR OWN GUIDELINES Since no standard exists, a business process/documentation specification must be developed that meets the needs of each particular organization. A business process specification must accomplish exactly what its name suggests: specify the structural and operational characteristics of a business process. Individual organizations are left to create their own guidelines for developing this crucial document. However, to keep audiences engaged, business process specifications must serve their purpose while avoiding providing information audiences consider irrelevant.  THIRD PARTY EVIDENCE As much as third party evidence is accepted, is best used as a supporting or corroborating evidence, hence home grown document that provides from initial to final processes with complete narration/descriptions must not be subtitled with third party evidence.  RELATIONSHIP TO OTHER DOCUMENTS In a well-structured documentation system, a business process specification should be derived from a corresponding policy. The policy may do no more than state that the process will exist, but it authorizes the creation of the process. Subordinate to the business process specification are documents that address procedures used to realize and implement the process, as well as possible work instructions to provide additional required detail. The policy, process specification, procedures, and work instructions might be organized together and referred to as a “practice.” HOW TO EFFICIENTLY DOCUMENT BUSINESS TRANSACTIONS Organizations nowadays have come to realize that to reach their peak potential, they must operate their business as a set of processes, each one distinct but interconnected with the others. This view of a business as a group of interrelated processes has emerged as the dominant business management pattern today. GOING FORWARD This article provides an overview of the process and content used to write a business process specification. As an organization becomes more experienced in the creation of business process specifications, a style and list of required contents will emerge that best serves the needs of the organization's audiences. In the next edition we will be focusing on business documentation and many more financial advisory services, we do all these and many more in J O AWOYEMI & CO (JOA) as a value added firm.

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