Bookkeeping Basics for a Small Trader in Ghana (2026)

The books are not for the tax man. They are for you.

Ask a trader at Makola or Kejetia how the business did last month and you will usually get a number that is really a feeling. Sales were "good". The store was "moving". What almost nobody can tell you off-hand is the figure that decides whether the business survives: what was left after stock, rent, wages, transport and charges came out — and whether that leftover is bigger or smaller than the same month last year.

Bookkeeping is how you get that number. Everything else it does — satisfying the Ghana Revenue Authority, surviving an audit, convincing a lender you are worth ₵80,000 — is a by-product. This guide covers the legal minimum, the smallest set of books that meets it, the accounting basis that applies to you, and a worked month for a real-shaped shop.

What the law actually requires you to keep

The obligation sits in section 27 of the Revenue Administration Act, 2016 (Act 915), and it is short. A person shall maintain, within the country, necessary records to provide the information behind anything filed with the Commissioner-General and to enable an accurate determination of tax payable. Section 27(2) spells out what "necessary records" means: underlying documents "in the nature of receipts, invoices, vouchers, contracts or in the case of electronic records, any medium by which the information can be extracted."

Three things follow from that wording, and small traders get all three wrong.

Electronic is fine — extractable is the test. Act 915 defines a document as including one "in electronic or other form". A spreadsheet, an app, photographed receipts in a dated folder all qualify. What does not qualify is a system nobody but you can pull figures out of. If your records are 400 unlabelled photos on a phone, they are not extractable.

Six years, and sometimes longer. Section 27(3) requires retention "for at least six years from the relevant date", and the relevant date is defined in section 27(5): for income tax, the end of the year of assessment; for VAT, the end of the accounting period. The six years extend automatically where you object to or appeal a tax decision (until it is decided and executed), where you have an application in (until determined), where a refund is due (until it is paid), and where you have received notice of an investigation — those records must be kept until the Commissioner-General tells you in writing that the investigation is complete.

Six years is not an accident. Section 37(5) gives the Commissioner-General six years to make an original assessment. The retention period is built to match the assessment window. Where there is fraud, wilful default or serious omission, section 37(4) removes the time limit entirely.

Note the "within the country" requirement. Cloud accounting is not prohibited, but you should be able to produce the records in Ghana on request, because section 33 gives the Commissioner-General full and free access to premises, documents and assets without prior notice — between 6:00 a.m. and 6:00 p.m. at a dwelling house or public premises, and at all times in any other case. That access includes opening packaging and taking stock samples.

What it costs to not keep them

Section 72 of Act 915 prices the failure. Where the failure to maintain proper documents is deliberate, the penalty is 75% of the tax attributable to that period, for each month or part of a month the failure continues. In any other case it is the lesser of that amount and 250 currency points. Section 108 defines a currency point as one cedi, so the non-deliberate cap is ₵250 a month — small, and it accrues quietly for years.

The bigger exposure is indirect. Section 28(3)(c) lets the Commissioner-General demand a return specifically because a person "fails to maintain adequate documentation as required under section 27". If you cannot substantiate your figures and the assessment is adjusted, section 74 takes over: a return understating tax by between 30% and 50% is treated as a false or misleading statement (30% of the shortfall); understate by 51% or more and it is treated as false or misleading without reasonable excuse, which carries 100% of the shortfall. Interest under section 71 runs at 125% of the Bank of Ghana policy rate, compounded monthly, on top.

There is one lever worth knowing: section 74(2)(b) reduces the penalty by 20% if you voluntarily disclose the error before a tax officer discovers it or before your next audit, whichever is earlier. Finding your own mistake is worth money.

Cash basis or accrual: which applies to you

This is the single decision that shapes your books, and the answer is in the Income Tax Act, 2015 (Act 896), summarised in the GRA's own abridged version.

• A company must account on an accrual basis. No choice.
• A person other than a company — a sole proprietor, a partnership — may account on either a cash or accrual basis, "whichever most clearly reflects the income of that person."
• An individual accounts on a cash basis when ascertaining employment or investment income.

Cash basis means you record income when the payment is actually received or made available to you, and an expense when it is paid. Accrual means income when it is receivable and an expense when it is payable, whether or not money has moved.

For most small traders the cash basis is both simpler and more honest. The exception is the trader who sells on credit. If half your August sales are to chop bars who pay in September, a cash-basis book will show a terrible August and a suspiciously good September, and you will never see the real trend. Once your credit sales are material, an accrual book — or at minimum a separate debtors list — is what "most clearly reflects" your income.

Your year of assessment is the calendar year. For an individual or a partnership, so is the basis period. A company uses its accounting year or another period approved by the Commissioner-General.

The five books a small trader actually needs

Nothing in Act 915 or Act 896 obliges an unincorporated business to run double-entry or hire a licensed accountant. What is required is that the figures can be extracted and the tax determined accurately. Five records do that.

1. The cash and MoMo book. Every cedi in and out, dated, with a one-line description. Keep cash, bank and each MoMo wallet as separate columns or separate tabs — mixing them is the most common reason a book will not reconcile. Include the charges: transaction fees are a real deductible cost, and if you have not read our guide on how to reduce mobile money charges, that column will show you exactly what they cost you a year.

2. The sales record. Daily total, split between cash, MoMo and credit. If you issue receipts, keep the duplicate. If you are VAT-registered, this is where the tax invoice numbers live.

3. The purchases and expenses file. Every supplier invoice and receipt, filed by month. Where you buy from a market supplier who issues nothing, write your own voucher on the day: date, supplier, item, quantity, amount, and your signature. A contemporaneous voucher is weak evidence; no record at all is none.

4. The stock count. Opening stock, purchases, closing stock. Count at least monthly. Without it you cannot compute cost of goods sold, and without cost of goods sold you do not have a profit figure — you have a bank balance, which is a different thing. Act 896 uses the absorption cost method for trading stock, and FIFO or average cost for fungible items.

5. Debtors and creditors. Who owes you, who you owe, with dates. This is the book that tells you a customer has quietly stopped paying while still collecting goods.

Separate the business from the household. Everything else depends on it.

This is the cheapest decision in small business finance and the most commonly skipped. Open a business account, run business receipts through it, and pay yourself a fixed amount out of it on a fixed day. Our guide to choosing a bank account covers what to compare, and you can compare bank accounts side by side before you walk into a branch.

The money you take for the household is drawings, not an expense. It does not reduce your profit and it is not deductible. Recording it as one is not a technicality — it is the error that produces a shortfall large enough to land in section 74 territory.

If your business is registered as a company rather than a sole proprietorship, the separation is not optional at all. Section 127 of the Companies Act, 2019 (Act 992) requires a company to keep proper accounting records covering sums received and expended, sales and purchases of property, goods and services, and assets, liabilities and members' interests. Section 127(2) adds a quality test with teeth: records that do not give a true and fair view and are not sufficient to prepare proper financial statements "are not proper accounting records" at all. They may be bound volumes or electronic, but under section 127(4) they must be kept at the registered office or another place in Ghana and be open to the directors, Company Secretary and auditors. Our guide to registering a business in Ghana sets out which structure you are in.

What is deductible, and what only looks deductible

The GRA's abridged Act 896 states the test plainly: an expense is deductible if it is wholly, exclusively and necessarily incurred in the production of the business or investment income for the year. Allowable deductions include interest on money borrowed for the business, trading stock, repairs and improvements, research and development, and financial costs.

A deduction is disallowed for an expense of a capital nature — and Act 896 gives a usable definition: an expense of a capital nature includes one that "secures a benefit that lasts for more than twelve (12) months." That is your everyday test. Restocking the shelves is stock. A new deep-freezer is capital: it does not come off this month's profit, it is written down over time through capital allowances.

Mixed-use costs are apportioned, not claimed in full. If your phone is 60% business, deduct 60% and write the basis of the split in the book once, so you can defend it years later.

A worked month: a provisions shop in Kumasi

Illustrative figures, August 2026, sole proprietor, cash basis with a debtors list.

Now the expenses: rent ₵1,800, shop assistant ₵1,400, electricity ₵620, bank and MoMo charges ₵180, cartage ₵740, and airtime and data of ₵160 of which 60% is business use, so ₵96. Total ₵4,836. Net profit: ₵17,664.

Two items are deliberately not in that list. The owner took ₵6,000 for the household — drawings, not an expense. And a new deep-freezer cost ₵9,200 — capital, because the benefit lasts well beyond twelve months, so it is relieved through capital allowances rather than deducted outright.

A trader who wrongly deducted both would declare ₵2,464 instead of ₵17,664: an understatement of ₵15,200, comfortably past the 51% margin at which section 74 treats the statement as false or misleading without reasonable excuse — 100% of the shortfall, plus interest at 125% of the policy rate compounded monthly.

One last check takes thirty seconds and catches nearly everything. Opening cash plus receipts, minus payments, should equal the cash you can physically count at close. If it does not, the difference is a transaction you have not recorded yet. Do it daily and the gap is never more than a day's memory wide.

If you are VAT-registered, the invoice is part of the bookkeeping

Under the VAT Act, 2025 (Act 1151), the rate on a taxable supply is a flat 20% of the taxable value — VAT at 15% plus NHIL at 2.5% plus GETFund at 2.5%, all applied to the same base rather than stacked on each other. On a tax-inclusive price the tax fraction is 20/120, exactly one sixth. Our guide to VAT in Ghana works through it, and the VAT calculator does the arithmetic.

The GRA also operates the Certified Invoicing System (E-VAT), an electronic VAT invoicing solution which the Authority is explicit is "not a new tax". Onboarding is by writing to your Taxpayer Service Centre, the software is installed free for VAT-registered businesses that do not already have one, and issued receipts carry a QR code a customer can scan to verify. If you are registered, your invoice numbering, your sales record and your VAT return have to agree with each other — the sales book is no longer just for you.

Records are also how you get money, not just how you keep it

Every lender assessing a small business asks the same question in different words: can you show me twelve months? A trader with a cash book, a stock count and a bank account showing consistent business turnover is a different applicant from one with the same real profit and no evidence of it. Twelve months of clean statements often matters more than the profit figure itself.

Records also decide the price of money. Lenders check your record with a licensed credit bureau — our guide on how to check your credit score explains how to see what they see — and the ones who lend against documented cash flow are almost always cheaper than the ones who do not ask. If you are weighing options, compare business loans and read up on SME loans from the Development Bank Ghana before signing anything, and check how to spot an unlicensed lender if an offer arrives unsolicited. Taking a personal loan to plug a business gap is a last resort with a different risk profile, covered in our guide to personal loans in Ghana.

A routine you will actually keep

Daily, five minutes: write the day's sales split, log every payment out, count the cash and reconcile.

Weekly, twenty minutes: file the week's invoices and vouchers by month, update debtors and creditors, chase anything over 30 days.

Monthly, an hour: count stock, compute cost of goods sold and net profit, compare against the previous month, and check what the trend in your gross margin is telling you.

Annually: pull the twelve months together for your return, and archive the year's file with a label. Six years of labelled folders is not a burden; it is the difference between a routine audit and an expensive one. The complete guide to tax in Ghana sets out where the return itself fits, and if you employ anyone, how PAYE works and SSNIT are the two obligations that arrive with your first hire.

Frequently asked questions

Do I have to use double-entry bookkeeping? Not as an unincorporated business. Act 915 requires records from which the information can be extracted and the tax accurately determined — it does not prescribe a method. A company is different: section 127 of Act 992 requires records sufficient to produce financial statements giving a true and fair view, which in practice means a proper double-entry system.

Can I keep everything on my phone? Yes, if it is extractable. Act 915 defines a document as including one in electronic form, and section 27(2) accepts "any medium by which the information can be extracted". Dated, labelled photographs of receipts backed by a running spreadsheet qualify. An unsorted camera roll does not. Keep a backup — the six-year obligation is yours, not your phone's.

How long exactly must I keep records? At least six years from the relevant date: the end of the year of assessment for income tax, the end of the accounting period for VAT. Longer if an objection, appeal, application, refund or investigation is open — in the case of an investigation, until the Commissioner-General notifies you in writing that it is complete.

What if I have never kept books and want to start now? Start today rather than reconstructing backwards. Open the cash book with today's counted cash and today's stock count as your opening figures, and keep it unbroken from here. If prior years contain errors, section 74(2)(b) reduces the penalty by 20% for a voluntary disclosure made before a tax officer discovers the error or before your next audit — so a disclosure you initiate is cheaper than one that finds you.

Do I need an accountant? Not to keep the books. It is worth paying for a review at year end, particularly on capital allowances, stock valuation and the cash-versus-accrual choice, where an error repeats every year until someone catches it. Note that anyone who prepares a return for you for a fee must sign it under Act 915 and state what documents of yours they examined — so the quality of your records determines what they can certify.

My records are perfect but I still cannot tell if the business is working. What am I missing? Almost always a monthly gross margin. Gross profit divided by sales, tracked month to month, is the single number that reveals whether your prices are keeping up with your costs — which is a different question from whether cash is coming in. Our guide to managing money in Ghana covers the household side of the same discipline.

Reviewed 5 September 2026. Statutory references are to the Revenue Administration Act, 2016 (Act 915), the Income Tax Act, 2015 (Act 896) as summarised by the GRA, and the Companies Act, 2019 (Act 992). Penalty units under Act 992 are set by separate legislation that has been amended — confirm the current cedi value with the Office of the Registrar of Companies before relying on it.

This article is general information about record-keeping obligations in Ghana and is not financial, tax or legal advice. Your circumstances, business structure and turnover change what applies to you. Confirm your own position with the Ghana Revenue Authority or a qualified adviser before acting.