Money Skills for Small Business Level 3

Who it is for. People who have finished Money Skills for Small Business Level 2, or who can show the same skills, in any trade. Ghana's TVET framework has eight levels. National Proficiency II is for mostly routine work with limited supervision. National Certificate I is for "complex and varied activities under minimum supervision", and National Certificate II adds considerable responsibility and guiding others. This module is written at an advanced level, comparable to National Certificate I, reaching toward National Certificate II where you keep the books for others or supervise staff. That is the author's matching, not an official ruling.

Bridge from Level 2: what you already know

Level 2 gave you the statements. It did not show you how the numbers get there: double entry, the ledger, the trial balance, adjusting entries, reconciliation, stock valuation, payroll, ratios, loan schedules or a full set of controls. Level 3 does. All business names, people and figures in the worked examples are examples made up by the author, unless a source is shown. Prices, fees and tax rates that come from Ghana sources are tagged and dated October 2026.

How the module works

Each unit has learning outcomes, performance criteria, the range and the evidence your assessor needs. You are judged Competent or Not Yet Competent. Units 1 to 4 are the accounting core: they go much deeper than any trade book. Units 5 to 7 are about your own business, with examples from several trades (dressmaking, hairdressing, building, shop-keeping and repair), so use the examples closest to your trade and rebuild them with your own numbers.

For every calculation: write the sum, check it a second way, and keep your working in the logbook. In accounting, a number you cannot explain is a number you cannot defend.

Competency standard

Range. One month of sample or own transactions, both cash and credit. Evidence. Chart of accounts; journal; ledger; trial balance.

The accounting cycle

The cycle is the same every month, for a kiosk or a factory:

1. Collect the source documents: receipts, invoices, bank and MoMo statements, wage sheets.
2. Record each transaction in the journal (double entry).
3. Post the journal to the ledger.
4. Add up each account and draw a trial balance (before adjustments).
5. Make adjusting entries for things that belong to the month but are not yet in the books (Unit 2).
6. Draw an adjusted trial balance.
7. Prepare the income statement, balance sheet and cash-flow statement (Unit 2).
8. Close the income and expense accounts to equity and start the next month.

Steps 1 to 4 are this unit. Adjusting entries are normally made at the end of the accounting period so that income and expenses fall in the period in which they actually happened.

A chart of accounts that fits a small trade

A chart of accounts is the list of every account you will use, each with a number, so that everyone who keeps your books uses the same names. Use number ranges so that you can see the type at a glance. Keep it short: 25 to 40 accounts are enough for most small trades. Never open a new account for a one-off item without a reason, and never rename an account without a note.

The number ranges are the author's suggestion: 1000s assets, 2000s liabilities, 3000s equity, 4000s income, 5000s cost of sales, 6000s other expenses. A trade may add accounts, for example "Stock of hair products" for a salon or "Spare parts" for a repairer. Keep cash, MoMo and bank as three separate accounts, because Unit 3 reconciles each one.

The rule of double entry

Every transaction has two sides, and the two sides are equal. The accounting equation is assets = liabilities + equity, and in double-entry bookkeeping each transaction is recorded as at least one debit and one credit of equal total. A debit is the left side of an account and a credit is the right side. They do not mean "good" or "bad", and a debit is not "money in". Memorise this table:

A quick memory aid from the author: things you have and things you spend go up on the debit side; things you owe, things you put in and things you earn go up on the credit side.

Each time, ask three questions: (1) Which two accounts change? (2) What type is each? (3) Does each go up or down, so which side is it? Then write the entry as Dr (debit) account, Cr (credit) account, and the amount.

The journal

The journal is the diary of entries in date order. Each entry shows the date, the accounts debited and credited, the amount, a short note and the number of the source document (receipt number, invoice number). Your Level 2 cash book is already a journal for cash, MoMo and bank. Credit sales and credit purchases need a journal or a sales and a purchases book because they are not in the cash book yet.

Worked example: Ama's Dressmaking, September (example)

Ama starts a dressmaking business on 1 September. All numbers are examples. Read the twelve transactions, then see how each one is entered.

Notice that T3 does not change profit: it swaps one asset (cash) for another (a machine). Notice that T7 is a sale even though no cash came in: Level 2 warned you that profit is not cash. Notice that T12 is not an expense: for a sole proprietor, money you take out is drawings, which reduces equity but does not appear in the income statement. T4 is not an expense either: the cloth is stock until it is used.

The ledger

The ledger has one page, or one table, for each account. You post each journal line to the account it names, on the correct side, and you keep a running balance. Here is the cash account after posting T1 to T12 in date order.

Cash ends at GH¢9,950. Do the same for every other account. The two-sided "T" shape is only a picture: a table with a running balance is enough. Here are the balances of the accounts that were touched more than once.

The trial balance

A trial balance lists the balance of every ledger account on a given date, in a debit column and a credit column. If every entry was balanced and posted correctly, the two columns total the same. This is the trial balance for Ama's books before any adjustments, at 30 September:

(The totals are the author's sums: debits 9,950 + 1,000 + 2,400 + 900 + 3,000 + 800 + 250 + 600 = 18,900; credits 1,400 + 2,000 + 10,000 + 5,500 = 18,900.) Keep this trial balance: Unit 2 adjusts it and builds the statements from it.

What the trial balance cannot find

If the two columns differ, there is an error. If they agree, there may still be errors. A trial balance does not detect:

• an entry left out completely (both sides missing)
• both sides recorded with the same wrong amount
• debit and credit swapped (the right amount on the wrong sides)
• the right amount on the right side, but in the wrong account of the same type (for example, rent posted to power)
• the right amount in an account of the wrong type (for example, an expense posted as an asset)
• two or more errors that cancel each other out

Finding a difference. Work in this order: (1) Add the columns again. (2) Compute the difference. If it is exactly half of a number in the books, a debit may have been posted as a credit, or the other way round. (3) If the difference can be divided by 9 (for example 90, 270), two digits may have been swapped, such as 540 written as 450 (a rule of thumb from the author, which works for single swaps). (4) Check that every journal line was posted twice. (5) Look for a missing balance carried from one page to the next. Correct a mistake with a correcting journal entry that is dated, explained and signed. Never rub out or tear out a page.

Competency standard

Range. One month of the trainee's books, continued from Unit 1. Evidence. Adjusting journal; adjusted trial balance; three statements.

Why adjust

The matching principle says income and the costs that earned it belong in the same period, even when cash moves at another time. Adjusting entries do this. They cover prepayments (paid or received before the service is used or given), accruals (used or earned before cash moves) and estimates such as depreciation and bad debts. If a business records only cash, it is on a cash basis. If it records income when earned and cost when incurred, it is on an accrual basis. The statements in this book are on the accrual basis, because that is what banks and tax officers expect from bigger traders.

Depreciation

Tools wear out. Depreciation spreads the cost of a tool over the years it will be used. Straight-line depreciation = (cost − salvage value) ÷ useful life. Salvage value is what you expect to sell it for at the end. Record depreciation as Dr Depreciation (expense), Cr Accumulated depreciation (a contra-asset that reduces the tool's value). The tool's book value is cost minus accumulated depreciation.

Rules that save trouble: (1) Do not depreciate land. (2) Choose a useful life you honestly expect, and keep the same method every year. (3) Set a rule, for example "anything below GH¢500 is expensed straight away", and apply it every time. This is the author's suggestion. How the Ghana Revenue Authority treats depreciation for tax (capital allowances) was not verified: ask GRA or an accountant before you claim anything.

(The costs, lives and salvage values are the author's examples; the sums are cost minus salvage divided by life.)

Worked adjustments for Ama's Dressmaking

Take the trial balance from Unit 1. At 30 September, Ama finds six things the books do not yet show:

(The 5% bad-debt rate, the 40 interest and the 60-month life are examples.) The adjusted trial balance is the old one with these six entries added:

(Check the debit column yourself: 9,950 + 1,000 + 1,100 + 600 + 3,000 + 800 + 1,300 + 300 + 250 + 800 + 40 + 50 + 40 = 19,230. Credits: 50 + 40 + 1,400 + 240 + 2,000 + 10,000 + 5,500 = 19,230.)

The income statement

Revenue minus cost of goods sold is gross profit; minus the other costs is net profit. Drawings are not in it.

The balance sheet

The balance sheet lists assets, liabilities and equity on one day, and the two sides are equal. Equity is the owner's capital, plus net profit, minus drawings.

The cash-flow statement

A cash-flow statement splits the movement of cash into three groups: operating (customers, suppliers, wages, rent), investing (buying or selling machines and tools), and financing (owner's money in and out, loans). The direct method lists the cash received and paid. The indirect method starts from net profit and adjusts for non-cash items and changes in the balance sheet; it is the more common one.

It agrees with the cash account in the ledger. Now the indirect check, which shows why profit (GH¢2,720) is very different from operating cash (GH¢1,750):

(Arithmetic: 2,720 + 40 + 50 = 2,810; − 1,000 = 1,810; − 1,100 = 710; − 600 = 110; + 1,400 = 1,510; + 240 = 1,750.) A business can show a healthy profit while cash is thin, because money is stuck in debtors and stock. That is why the third statement matters.

Closing the month

At the end of each month (or year), the income and expense accounts and drawings are closed to the owner's equity so the new period starts at zero. Ama's net profit of 2,720 and drawings of 800 move to her equity (11,920 in total with the capital). The balance-sheet accounts are carried forward as the next month's opening balances. Keep the final statements, the adjusting journal and the trial balances together in one file for the month.

IFRS for SMEs: do you need it?

The IFRS for SMEs Accounting Standard is the international standard for the general-purpose financial statements of small and medium-sized companies. The 2025 edition applies from 1 January 2027. Whether your business must follow it depends on its legal form and on who asks for your accounts (a bank, an investor or the Registrar). The IFRS Foundation's profile of Ghana says the Institute of Chartered Accountants, Ghana adopted the IFRS for SMEs Standard in 2010, and that SMEs are permitted to use either it or full IFRS Standards. One table on that page says "required", so the page is not fully consistent: ask a qualified accountant, for example a member of the Institute of Chartered Accountants, Ghana, before preparing accounts for a company. Everything in this unit is in line with the usual ideas of that standard, but it is a simple management set of books, not a statutory audit.

Competency standard

Range. One month of bank and MoMo statements; one stock item; three workers. Evidence. Reconciliations; stock valuation sheet; payslips and payroll journal; tax diary.

Bank reconciliation

A bank reconciliation compares the bank balance in your books with the balance on the bank statement, then finds and explains every difference. Typical items are cheques you issued that the bank has not yet paid (outstanding cheques), money you banked that the statement does not show yet (deposits in transit), charges and payments the bank made that you have not yet written in your books, and recording errors. Do it at least once a month, and weekly if you have many transactions.

Worked example (example numbers), 31 October. The bank statement shows GH¢7,150. Your cash book bank balance is GH¢7,000.

The two adjusted balances agree at GH¢7,100, so the reconciliation is complete. Items in part A fix themselves (the bank will catch up). Items in part B need journal entries in your books: Dr Bank, Cr Sales (or Debtors) 180; Dr Bank charges 30, Cr Bank 30; Dr Loans 50 (or Dr Loan interest and Loans as the lender splits it), Cr Bank 50. If the two sides will not agree, look for a recording error, such as a figure copied wrongly, a payment recorded twice, or a number entered on the wrong side.

Mobile-money reconciliation

Most small traders sell through MoMo, so reconcile the wallet in the same way: compare the cash book's MoMo balance with the closing balance on the statement you download from the provider. A MoMo wallet has no outstanding cheques (money moves at once), so the differences are usually fees you did not record, payments you recorded twice or not at all, and money sent to the wrong person.

Worked example (example numbers). The cash book MoMo balance is GH¢2,300. The statement closes at GH¢2,670.

Agreed. Never say "the difference is small, let it go." A small unexplained difference every month is how fraud hides. Call 292 if you suspect fraud.

Inventory valuation

When you sell from stock, you must decide which cost goes to cost of goods sold, and which stays in closing stock. When prices change during the month, the answer changes the profit.

• FIFO (first in, first out) treats the oldest stock as sold first, so the oldest costs are expensed first.
• Weighted average cost spreads the total cost of all goods available over all units: average cost = total cost of goods available ÷ total units available (the author's definition of the standard method).
• LIFO (last in, first out) is banned under International Financial Reporting Standards, so a small business that may need IFRS-style accounts should not use it. Whether the Ghana Revenue Authority accepts each method for tax was not verified: ask GRA.

Choose one method, use it every year, and write it in your notes.

Worked example (example prices): a provisions shop sells 25 kg bags of rice.

FIFO: the 35 bags sold come from the oldest first: 10 × 300 = 3,000; 20 × 320 = 6,400; 5 × 340 = 1,700. Cost of goods sold = GH¢11,100. Closing stock is the 15 newest bags: 15 × 340 = GH¢5,100. Check: 11,100 + 5,100 = 16,200.

Weighted average: 16,200 ÷ 50 = GH¢324 a bag. Cost of goods sold = 35 × 324 = GH¢11,340. Closing stock = 15 × 324 = GH¢4,860. Check: 11,340 + 4,860 = 16,200.

At a selling price of GH¢400 a bag (example), sales are 35 × 400 = GH¢14,000. Gross profit by FIFO is 14,000 − 11,100 = GH¢2,900. By average cost it is 14,000 − 11,340 = GH¢2,660. The difference of GH¢240 is only a matter of timing: when prices rise, FIFO shows higher profit and higher closing stock. The cash you hold is the same.

Two ways to keep the records. A perpetual system updates the stock card after every sale. A periodic system counts the stock at month-end and works out cost of goods used as opening stock + purchases − closing stock (the author's description of the standard methods). The Level 2 stock sheet is perpetual. In Unit 2, Ama used the periodic way. Either way, count the shelf, and write down any difference between the count and the record as "stock loss" with a reason. If an item will now sell for less than it cost, write it down to the lower value (the author's rule of caution).

Payroll: PAYE and SSNIT

When you employ people, you become a tax collector. You must deduct SSNIT and income tax from pay, add the employer's share and pay the money over on time. The figures below were read on official pages on 7 October 2026. Confirm the current tables with GRA and SSNIT before you pay.

SSNIT. The employee pays 5.5% of basic salary and the employer pays 13%, a total of 18.5%. Of the total, 13.5% goes to SSNIT (Tier 1), within 14 days after month-end, and SSNIT passes 2.5% of salary on to the National Health Insurance Authority; 5% goes to a private Tier 2 trustee. Late payment is charged at 3% a month. Register each worker with SSNIT when you hire. The contribution ceiling is a salary of GH¢25,000.

PAYE 2026 monthly bands. Deduct the SSNIT 5.5% first, then tax what is left on these bands:

PAYE is due by the 15th of the next month. Casual workers are taxed at 5%; the exact meaning of "casual worker" and the rules for allowances, overtime and bonuses were not verified here, so ask GRA. The GRA page says the annual table took effect on 1 September 2026; confirm before use.

Minimum wage. The daily minimum wage for 2026 is GH¢21.77, about GH¢587.79 a month at 27 days, which matches the tax-free first band of GH¢588. Paying below it is illegal.

Worked example: three workers (example salaries; only basic pay, no allowances).

How PAYE is found for Worker A: taxable pay 1,417.50. First 588 at 0% = 0. Next 80 at 5% = 4.00. Next 100 at 10% = 10.00. The rest, 1,417.50 − 768 = 649.50, at 17.5% = 113.66. PAYE = 4.00 + 10.00 + 113.66 = 127.66 (rounded to the pesewa). For Worker B: 4.00 + 10.00 + (3,024 − 768 = 2,256) × 17.5% = 394.80 gives 408.80. For Worker C: 4.00 + 10.00 + 2,900 × 17.5% = 507.50, then (5,670 − 3,668 = 2,002) × 25% = 500.50; total 1,022.00.

Payroll journal for Worker A (one month):

When you pay the SSNIT money over: 277.50 is 18.5% of 1,500. Of this, 13.5% (GH¢202.50) goes to SSNIT and 5% (GH¢75.00) to the Tier 2 trustee. When you pay PAYE, Dr PAYE payable, Cr Bank. Keep the proof of payment with the payslip.

The payslip must show the pay period, basic pay, each deduction, net pay and the employer's name; give one to every worker and keep a copy. Labour Act 2003 reminders: a written contract for work of six months or more (section 12); a written statement of terms within two months (section 13); 15 working days of paid leave a year (section 20); 12 weeks of maternity leave (section 57); casual workers are paid at least the full minimum for each day (section 74); notice rules in section 17.

The tax diary

(The dates are those on the sources named, read on 7 October 2026.) A simple habit: put each date in your phone calendar with an alarm three days before, and write on the calendar who will pay and how.

VAT: what changed in 2026

From 1 January 2026, the Value Added Tax Act 2025 (Act 1151) applies. VAT is 15%, plus the National Health Insurance Levy 2.5% and the GETFund Levy 2.5%, making 20% in all (down from 21.9%), and the two levies can now be claimed back as input tax. The COVID-19 levy has been abolished and the 3% flat-rate scheme removed. The registration threshold for goods is GH¢750,000 a year, up from GH¢200,000. Returns and payment are due by the last working day of the following month, and e-VAT invoices can be checked with their QR code. For services there is no turnover threshold: taxable services must be registered within 30 days of starting. GRA's older domestic-tax FAQ page still shows GH¢200,000, which is out of date.

Worked example (example numbers; the treatment of each invoice must be checked with GRA). A registered trader sells goods worth GH¢10,000 before tax and buys goods worth GH¢6,000 before tax in the month.

If input tax were bigger than output tax, you would claim a refund or carry it forward. The rules for that were not verified. A VAT-registered trader cannot use the Modified Taxation Scheme.

Withholding tax and income tax

Withholding tax is tax that a payer takes from a payment and pays to GRA. The rates read on the GRA page are goods 3%, works 5%, services 7.5%, and rent 8% for residential and 15% for non-residential property, paid within 15 days after month-end. Who must withhold and from whom was not verified: ask GRA. Example: you pay GH¢5,000 for repair works, so 5% = GH¢250 is withheld and GH¢4,750 goes to the contractor; the GH¢250 goes to GRA within 15 days after the month-end.

Income tax for small traders. The Modified Taxation Scheme is for residents with business income only who are not VAT-registered. Turnover up to GH¢20,000 pays fixed instalments, and turnover of GH¢20,001 to GH¢750,000 pays 3% of turnover or uses the modified cash basis. Professionals, owners of several businesses or outlets, and partners are excluded. Example: sales of GH¢120,000 give 3% × 120,000 = GH¢3,600.

Companies pay 25% as the standard rate, 18.5% for manufacturers in regional capitals other than Accra and Tema (GRA's page is read as applying to Takoradi; confirm for your address), 12.5% outside regional capitals, and 8% for non-traditional exporters. Example: a company with taxable profit of GH¢40,000 and the standard rate pays 25% × 40,000 = GH¢10,000 for the year, paid in quarterly instalments. How taxable profit is found from accounting profit was not verified: use an accountant.

Competency standard

Range. The trainee's statements from Unit 2; one loan offer; one spreadsheet. Evidence. Ratio sheet; budget and variance report; loan schedule; spreadsheet; controls checklist.

Ratios

A ratio puts two numbers side by side so you can compare months, years and businesses of different size. Use the same method every time.

Current assets are assets you expect to turn into cash within a year (cash, debtors, stock, prepaid items); current liabilities are what you must pay within a year. Working capital = current assets − current liabilities.

Worked example: a provisions shop's year (example numbers). Sales GH¢480,000; cost of goods sold 360,000; other costs 84,000; debtors 40,000; stock 50,000; cash 20,000; creditors 30,000; a short-term loan 25,000.

Reading them. There is no number that is right for every trade; compare with your own past months and with similar traders (the author's advice). Falling gross margin often means prices have not kept up with costs, or goods are being lost. A current ratio below 1 means you owe more in the short term than you can turn into cash soon. Rising debtor days means customers are paying slower: chase them. Rising stock days means you are buying too much.

Budgets and variances

A budget is your plan in numbers for the coming month. A variance is actual minus budget. For income, a higher actual is favourable. For costs, a higher actual is adverse. Build the budget from your last three months plus known changes, review it the first week of every month and write one action beside each large variance.

Worked example: a salon's month (example numbers).

(Budget profit: 9,000 − 1,800 − 2,000 − 600 − 400 − 200 = 4,000. Actual: 8,200 − 1,950 − 2,000 − 600 − 520 − 100 = 3,030.) Check the total: −800 − 150 − 120 + 100 = −970.

Flex the budget. Products used should move with sales. The budget set them at 20% of income (1,800 ÷ 9,000). With actual income of 8,200, the flexed budget is 20% × 8,200 = GH¢1,640. The actual of 1,950 is GH¢310 over the flexed budget, which tells a stronger story: products are being wasted, lost or bought at a higher price. Check the stock count and the supplier's prices.

Loan analysis and repayment schedules

Under the Borrowers and Lenders Act 2020 (Act 1052), the lender must give you the interest rate, the total to repay and the repayment schedule before you sign. Ask for the annual percentage rate (APR), which puts different loans on one yearly basis. Level 2 showed that "flat" interest is charged on the whole loan for the whole time. Here is the full comparison.

An amortization schedule lists every payment and splits it into interest and principal; early payments are mostly interest, and the balance falls to nil at the end. For a loan with equal instalments on the reducing balance, the instalment is P × r ÷ (1 − (1 + r)^−n), where P is the loan, r is the rate per month and n is the number of months (the standard formula, checked by the author; in a spreadsheet use PMT).

Worked example: GH¢12,000 at 24% a year (2% a month), reducing balance, 12 months (example). The instalment is 12,000 × 0.02 ÷ (1 − 1.02^−12) = GH¢1,134.72.

(The last instalment is 5 pesewas lower because of rounding.) Total interest is GH¢1,616.59.

The same loan quoted "flat". A flat 2% a month (24% flat a year) on GH¢12,000 gives interest of 12,000 × 24% = GH¢2,880 and an instalment of (12,000 + 2,880) ÷ 12 = GH¢1,240. The flat loan costs GH¢1,263.41 more than the reducing-balance loan (2,880 − 1,616.59). Because you repay principal every month yet interest is charged on the full 12,000, the true monthly rate on what you owe is about 3.5%, which is about 42% a year when simply multiplied by 12 (author's calculation by trial: the rate at which twelve instalments of 1,240 have a present value of 12,000). Always ask whether the rate is flat or on the reducing balance, and ask for the total to repay.

Is the loan affordable? Debt service cover. Divide your average monthly cash available for loan payments (profit plus depreciation, before the loan instalment and before your own wage) by the monthly instalment. If your net cash before the loan is GH¢1,900 a month and the instalment is GH¢1,134.72, cover is 1,900 ÷ 1,134.72 = 1.67. Many lenders like to see cover of at least 1.25 (the Corporate Finance Institute gives 1.25 as a typical minimum, and many lenders prefer about 2; Ghana lenders' own figures were not verified). Test it in the worst month of your forecast, not the average month.

Is the loan worth it? Payback. If a GH¢10,000 machine bought with the loan brings in GH¢900 extra profit a month, the cost is paid back in 10,000 ÷ 900 = 11.1 months, but the interest of GH¢1,616.59 makes the real cost GH¢11,616.59, or 12.9 months. A loan that pays back faster than its term is working for you.

Check the lender. Use only banks, licensed microfinance companies and licensed digital lenders. The Bank of Ghana's directive of 23 September 2025 set a GH¢2 million minimum capital and a GH¢10,000 limit per digital loan, and the Bank named 20 unlicensed providers in September 2026. The Bank of Ghana policy rate was 14.00% when read. Current bank and microfinance lending rates were not verified: ask three lenders for the APR in writing.

Simple software: Google Sheets and free apps

A cash book in Google Sheets (free). Make one sheet called CashBook with these columns: A Date, B Ref (receipt or invoice number), C Details, D Category (use a drop-down list from your chart of accounts), E Money in, F Money out, G Balance. In G2 type =E2-F2. In G3 type =G2+E3-F3 and copy it down. A second sheet called Summary can total each category for a month:

=SUMIFS(CashBook!F:F, CashBook!D:D, "Rent", CashBook!A:A, ">="&DATE(2026,10,1), CashBook!A:A, "<="&DATE(2026,10,31))

Keep one row per transaction, never type over a formula, and never delete a row: add a correcting line instead. Share the sheet "view only" with your accountant, keep a download copy every month on a flash disk or in your email, and protect the Summary sheet. A loan schedule can be built with =PMT(0.02, 12, -12000). A spreadsheet is only as good as the habit of entering every transaction.

Free accounting apps. The Zoho Books free plan was listed for one user plus an accountant, up to 1,000 invoices a year and revenue under US$50,000. Wave offers a free Starter accounting plan. Both pages were seen as summaries only. Whether each app supports cedis, Ghana VAT and the Ghana e-invoice system was not verified; test with a month of your records before you rely on one. An app gives you automatic ledgers and statements, but you still need to understand Units 1 and 2 to check what it gives you.

Keep records for six years

The Revenue Administration Act requires you to keep records in Ghana for at least six years from the end of the year of assessment or VAT period, and longer if there is a dispute. Keep: cash books and ledgers; sales and purchase invoices and receipts; bank and MoMo statements; payroll sheets and proof of PAYE and SSNIT payment; stock sheets; contracts and loan papers; tax returns and filing proofs; permits; asset lists. Store paper in a labelled box for each year, in a dry place away from rats and fire; scan or photograph important papers and back them up. Whether records may be kept in electronic form only was not verified; keep paper originals until GRA confirms.

The audit trail

An audit trail lets another person follow any number in your statements back to the paper that caused it. Build it: (1) Number receipts and invoices in order and never throw away the book. (2) Write the document number in the journal or cash book beside the entry. (3) Date and sign each entry and each correction. (4) Never use correction fluid or tear a page: strike through once, write the right figure and initial it. (5) File documents in the same order as the entries. (6) Save the month-end statements as they were on the day of closing.

Fraud controls

Fraud usually needs three things at once: a chance, a pressure and an excuse (the author's summary of a common idea). You cannot remove the pressure or the excuse in other people, so remove the chance.

Petty cash imprest (example). The float is GH¢500. During the week, vouchers are for transport 120, tea and water 85 and stationery 60. Cash left in the tin should be 500 − 265 = GH¢235. The owner counts the cash and checks the vouchers. The top-up is GH¢265 to bring the tin back to GH¢500. The journal charges each expense account for the vouchers and credits cash (or bank) with the top-up.

Competency standard

Range. Any trade; a real or sample business in Sekondi-Takoradi. Evidence. Legal-form note; registration file; start-up budget; funding plan; one-page plan; pitch.

Choose a legal form

(Fees for the first four rows are from the ORC fee page, read on 7 October 2026). Annual returns cost GH¢175 a year, and late returns cost GH¢1,000 for 1 to 4 years and GH¢2,000 for 5 years and more.

How to choose. (1) Start as a sole proprietor if you work alone and can bear the risk. (2) Choose a partnership only with a written agreement that states each partner's money, work, profit share and how to leave. (3) Choose a company when you will sign big contracts, hire many people, need to protect your home from the business's debts, or bring in investors. (4) Choose a cooperative when members will buy or sell together. A company carries more records and more fees, so do not form one only for the name. The Modified Taxation Scheme is closed to partners and to owners of several outlets.

Register step by step

1. Ghana Card and TIN. The PIN on your Ghana Card is your individual TIN, in use since 1 April 2021; a company gets its TIN from GRA after registration at the ORC. The TIN is free; never pay anyone for it.
2. Choose and check a name. Prepare three names.
3. Register at the Office of the Registrar of Companies. A business name can be renewed by USSD *222#.
4. Assembly business operating permit. The Sekondi-Takoradi Metropolitan Assembly has an online portal at tcc.stma.gov.gh. Unregistered businesses pay a 30% penalty and fees are due by 31 March. Some 2025 annual fees: small tailor or dressmaker GH¢120; small salon GH¢100; mason, plumber, electrician, painter, tiler GH¢100; small mobile-money vendor GH¢270. Check the current year's fee.
5. Trade licences. See the table below.
6. Tax. Register for the Modified Taxation Scheme, or for normal taxes if you are a company or VAT-registered. Employers also register for PAYE and register workers with SSNIT.
7. Open a business bank account or MoMo merchant wallet separate from your own (Units 1 and 3).
8. Insurance (below), and a written record of all registration numbers and renewal dates in the tax diary.

Worked example: cost of registering (example business; fees from the sources).

(The sums are the author's. The company row assumes the 1% capital duty rate is right and that the permit fee is the same as for the salon; both must be checked.)

Trade-specific licences. Only the bodies that apply to your trade matter. The details below were not verified in this book: ask each agency, and read the trade's own Level 2 and Level 3 manual.

Premises and location that give good returns

Use Level 2's site test (the hub's Money Skills Level 2), then add: (1) Rent as a share of sales. Work out the sales you expect, and check that rent stays a modest share of them; as a rule of thumb from the author, if rent is more than about one-sixth of your expected sales, the site is too dear. (2) Lease. Get a written agreement that states the rent, the months paid in advance, who repairs what and how to leave. (3) Utilities. Check for a separate meter and a safe wiring system. (4) Allowed use. Ask the Assembly whether your trade is allowed at that spot before you pay rent. (5) Access. A step-free entrance, a wide door and light help customers and workers who use a wheelchair or walking frame.

Start-up budget

Add up everything you must pay before your first sale, plus enough cash to survive the first months.

Worked example (example prices; check yours with three quotes).

(The totals are the author's sums.) The mason has no first stock because each job's materials are paid from the client's deposit, which is why working cash is important.

A funding plan for the dressmaker: own savings GH¢6,050 + savings-group share-out GH¢2,000 + loan GH¢8,000 = GH¢16,050. The loan on the reducing balance at 2% a month for 12 months gives an instalment of about GH¢756.48 (8,000 × 0.02 ÷ (1 − 1.02^−12)); test it against the lowest-cash month of your forecast (Unit 4).

Where start-up money can come from

The one-page business plan and the three-minute pitch

Write the plan so a bank officer can decide in two minutes.

The pitch takes three minutes: (1) the customer's problem, (2) what you offer, (3) proof (portfolio, first customers), (4) the numbers (break-even, profit, repayment), (5) the ask. Practise with a stopwatch.

Hire and supervise staff and apprentices

• Minimum pay. The daily minimum wage for 2026 is GH¢21.77. Casual workers are paid the full minimum for each day.
• Written terms. A written contract is needed for work of six months or more (section 12), and a written statement of terms within two months (section 13). Paid leave is 15 working days a year (section 20); maternity leave is 12 weeks (section 57); notice rules are in section 17.
• SSNIT and PAYE. Register workers on hiring and follow Unit 3.
• Apprentices. Write an agreement that states the length, what you teach, any stipend, the hours and the days off. The Labour Act's apprenticeship rules were not read for this book. The National Apprenticeship Programme (GH¢170 million in the 2026 Budget) is a possible source of trained apprentices and start-up kits.
• Supervise. Give each person a written job list, brief them at the start of the day, check the first piece of work, inspect before delivery, and praise good work in public and correct in private.

Worked example: the cost of a first hire (example). A dressmaker hires a seamstress at GH¢1,200 basic a month. SSNIT employee 5.5% = GH¢66.00. Taxable pay GH¢1,134.00. PAYE: 4.00 + 10.00 + (1,134 − 768 = 366) × 17.5% = 64.05, which gives GH¢78.05. Net pay = 1,200 − 66.00 − 78.05 = GH¢1,055.95. Employer SSNIT 13% = GH¢156.00. Total monthly cost to the business = GH¢1,356.00. The hire must bring in more than that in extra gross profit.

Insure the business

Check that an insurer is licensed by the National Insurance Commission at nic.gov.gh before paying anything. Commercial property in Ghana is reported to need cover against fire and other perils, with certificates inspected by the regulator and the fire service, but the article refers to the 2006 Act that the Insurance Act 2021 replaced, so section numbers are not verified. Market fire, traders and small-business policies cover fire and burglary, though many traders think them too costly. Which covers are compulsory in Ghana for a given business was not verified. For comparison only, UK employers must hold employers' liability insurance of at least £5 million; that is UK law, not Ghana law. Get three written quotes and read what is not covered.

Safety and compliance

Keep a first-aid box, an extinguisher where there is heat or flammable material, clear exits and safe wiring. Follow your trade's safety manual. Keep a folder of permits, certificates, receipts for taxes and insurance, with renewal dates in your tax diary.

Market yourself

• WhatsApp Business is a free app with a business profile, a catalogue and quick replies. Put three products in the catalogue and set an opening message.
• Google Business Profile is a free listing on Google Search and Maps. Never pay anyone to "verify" you.
• Portfolio. Photos of finished work, with permission, and written or voice reviews.
• Signage. Your name, trade and phone number on the road side.
• Referrals. Ask every happy customer to send one friend. Give a small thank-you.
• Budget. Set a small monthly marketing budget; as a start, the author suggests 3 to 5% of sales and then track which method brought each new customer.

Accessibility

Ghana's Persons with Disability Act, 2006 (Act 715) is reported to give employers a tax rebate for hiring disabled people and to require working tools, although not always put into practice. The Assemblies' disability fund rose to 5% in 2026. These suggestions are the author's: a step-free entrance and a wide door; large print prices; talking calculators and screen readers for blind staff and owners; picture price lists and visual alerts for deaf customers and staff; a seat at the counter; a helper for anyone who needs support. Ask disabled customers and workers what would help most.

Competency standard

Range. One month for a real or sample business in a trade. Evidence. Document set; cash book; stock and debtor lists; costing sheets; month-end file.

Quotations, invoices and receipts

(The contents are the author's checklist.) If you are VAT-registered, your invoices must be e-VAT invoices that can be checked by QR code. Number every document in order, keep a copy, and file by month. Never write a receipt for money you did not receive.

The cash book with MoMo and bank columns

Most small traders now take money by cash and mobile money. Keep one cash book with one column for each. Here is a page for Akosua's tailoring shop, October (example). Cash in the tin on 1 October is GH¢800 and the MoMo wallet holds GH¢1,200.

(Cash 2,660 − 1,415 = 1,245; MoMo 3,000 − 1,025 = 1,975. Together GH¢3,220.) Watch four traps: the transfer of 500 appears on both sides because it moves money between your own pockets; the customer's deposit of 300 is a liability, not a sale; the old debt of 350 was a sale last month, so it is not income now; and the owner's wage is drawings, not a business cost.

Month-end close for Akosua's shop

Her notebook also shows: an invoice for GH¢500 for uniforms sent on 27 October and not yet paid (credit sale); stock of cloth and thread GH¢300 at the start and GH¢250 at the end; the sewing machine costs GH¢2,400, is 15 months old, has no salvage value and a 5-year life (GH¢40 a month). The debtors at the start were GH¢350 (the debt paid on 20 October).

She took GH¢600 as her wage, so GH¢980 of profit stayed in the business. Now the trial-style checks, which every month-end must pass:

Opening equity is cash 800 + MoMo 1,200 + stock 300 + debtors 350 + machine 1,800 (2,400 less 600 depreciation to date) = GH¢4,450. At 31 October the assets are cash 1,245 + MoMo 1,975 + stock 250 + debtors 500 + machine 1,760 = GH¢5,730. The only liability is the customer's deposit of GH¢300. Assets 5,730 − liabilities 300 = GH¢5,430, which equals the equity. The books balance. If they had not, you would look again at the cash book and the invoice list before touching anything else.

Month-end routine (do it in the first five working days)

Debtors, creditors and ageing

List who owes you and who you owe, with the invoice date and due date. An ageing table groups debts by how old they are.

Example: debtor ageing (example) and a bad-debt policy.

An example policy (the author's): set aside 1% of debts up to 30 days old, 10% of 31–60 days and 50% of those over 60 days. That gives 5.50 + 25.00 + 450.00 = GH¢480.50, so debtors of GH¢1,700 are shown as GH¢1,219.50. Chase the church before it ages further, and collect a deposit next time. For creditors, pay on the due date (not before, not after), and take the supplier's discount only when it beats the cost of the cash.

Costing and pricing a product

Margin and markup. Markup is profit as a share of cost; margin is profit as a share of price. To go from a target margin to the markup, use markup = margin ÷ (1 − margin).

Worked example: a dress (example). Cloth, thread and buttons GH¢60. The seamstress's time is 5 hours at GH¢15 an hour, so GH¢75 of direct labour. Monthly overhead (rent 400, power 80, phone 40) is GH¢520 over an expected 40 dresses, so GH¢13 a dress. Cost = 60 + 75 + 13 = GH¢148. With a 30% margin, price = 148 ÷ (1 − 0.30) = GH¢211.43, which she rounds to GH¢212. If she wrongly adds 30% markup, the price is 148 × 1.30 = GH¢192.40, which gives a margin of only (192.40 − 148) ÷ 192.40 = 23.1%. If her own wage is already in direct labour, do not count it again in overhead.

Break-even for a salon (example). Monthly fixed costs: rent 600, power 300, phone 60, permit share 8.33 (100 ÷ 12), depreciation of equipment 83.33, stylist's wage 1,500: total 2,551.67. The average service sells at GH¢80 and the products used cost GH¢20, so each service brings GH¢60 toward fixed costs. Break-even = 2,551.67 ÷ 60 = 42.5, rounded up to 43 services a month, or about 1.7 a day over 26 days. To earn GH¢500 extra, 3,051.67 ÷ 60 = 50.9, so 51 services.

Job costing for a mason (example). A boundary wall:

With a 20% margin, price = 6,072 ÷ 0.80 = GH¢7,590, a profit of 1,518. Ask for a 50% deposit (GH¢3,795) and record it as a customer deposit (a liability) until the work is done. On completion: Dr Customer deposits 3,795, Dr Debtors 3,795, Cr Sales 7,590. If a company pays a works invoice and withholds 5%, you receive 7,590 − 379.50 = 7,210.50 in cash; ask the payer for proof of the tax withheld (the rate is from GRA WHT; who withholds was not verified).

Other trades. A repairer keeps a parts stock card and values it by FIFO, since part prices change; if he promises a 30-day guarantee, he can set aside, for example, 2% of repair income to cover free re-work (an example policy). A shop keeps a stock card per item, counts weekly and records stock losses. A farm or food processor adds the cost of seeds, feed or ingredients, and counts losses from spoilage as a separate line. Use the same cycle everywhere.

Owner and business apart

Open a separate account or wallet and a separate cash tin. Pay yourself a fixed wage on a fixed day and record it as drawings. Never pay the owner's school fees or shopping from the business till. Draw no more over a year than the profit you earned, or the business shrinks. When the books show a loss for three months running, change prices, costs or location before borrowing.

Competency standard

Range. The trainee's own business plan from Unit 5 and books from Units 1 to 6. Evidence. Quality system; pricing rules; contract template; loan pack; 12-month forecast; panel presentation.

Quality systems and customer care

Write a checklist for each service or product: what must be true before it leaves you. Inspect against it every time, record rework and fix the cause. Track three numbers each month: rework rate (jobs redone ÷ jobs done), on-time delivery (jobs on time ÷ jobs) and repeat customers (returning ÷ all). Example: 6 of 80 jobs redone is 7.5%. Keep a complaints register: date, who, what, what you did, how long it took. Handle each complaint in four steps: listen, apologise, fix, record. Reply to messages the same day, and ask pleased customers for a review on your Google Business Profile.

Pricing strategy

Price on cost plus margin (Unit 6), then check against what competitors charge and what the customer values. Have written rules for deposits, discounts and credit. A discount is more costly than it looks.

Worked example (example numbers). An item costs GH¢70 and sells for GH¢100, so unit profit is GH¢30. A 10% discount gives a price of GH¢90 and a unit profit of GH¢20. To earn the same total profit, you must sell 30 ÷ 20 = 1.5 times as many, 50% more volume, only to stand still. If the cost is GH¢60 (profit 40), a 10% discount leaves 30, so you need 40 ÷ 30 = 1.33 times as many, or 33% more. Discount only when it brings new volume you could not get otherwise.

Scaling

Grow when the numbers say so, not when you feel busy. A rule of thumb from the author: add a machine, chair or worker only after three months at or above 80% of your capacity, with cash to cover three months of the extra cost. Watch these thresholds: (1) Modified Taxation Scheme is closed to owners of several outlets and partners, so opening a second outlet or taking a partner changes your tax route. (2) VAT registration for goods is required above GH¢750,000 a year; for taxable services there is no threshold; taxable services must be registered within 30 days of starting. Track your sales every month and speak to GRA before you get close. (3) A company protects your personal assets and is needed by some buyers, but it costs more to run.

Partnerships, contracts and tenders

A written contract should state the parties, the work and what is excluded, the price, the deposit and milestone payments, the dates, who supplies materials, how changes are priced, warranty and defects, how to end it and how to settle disputes. Never start big work without a signed quotation and a deposit. Subcontract only with a written agreement, a clear scope and your inspection. For tenders and larger supply contracts, ask the organisation for its requirements, bring your registration documents, tax proofs and past work, and price carefully, including the 5% or 7.5% withholding on works and services that may apply. Public-procurement rules and tax-clearance requirements were not verified: ask the Public Procurement Authority and GRA, or a GEA Business Advisory Centre in Takoradi.

Keep records for loans

A lender or grant officer will want a loan pack: your registration papers and TIN; 12 months of bank and MoMo statements; your cash book, ledger and the three statements; your tax filings and proof of payment; a 12-month cash forecast; a quotation for what you will buy; your one-page plan; the debtor and creditor lists; ID and, where asked, a guarantor. A savings-group record also helps, because group-to-bank linkage programmes aim to help members build a credit history. Clean, dated records are the strongest security you have.

Succession and ethics

Succession. Write down how to run the business if you are ill or away: where the keys, passwords and statements are; who may sign; supplier and customer lists; the tax diary; the next steps for each job in progress. Train a deputy. Talk to a lawyer about a will and about who takes the business; this book gives no legal advice.

Ethics. Pay the taxes you owe. Give honest weights, prices and receipts. Say clearly what a warranty covers. Pay staff on time and at least the minimum wage. Protect customers' phone numbers and photos. Never pay or take a bribe. Treat customers and workers with and without disabilities the same.

The 12-month cash-flow forecast (worked example)

A dressmaker plans to buy equipment of GH¢10,000 in January with a GH¢12,000 loan (the schedule in Unit 4) and GH¢3,000 of her own cash. Assumptions (example): sales by month as in the table; 85% of sales received in the month and 15% the next month; materials 35% of sales, paid in the month; two staff at GH¢2,000 in all; rent, power, phone and marketing GH¢900; owner's wage GH¢1,200; Modified Taxation Scheme 3% of sales; Assembly permit GH¢120 in March; loan instalment GH¢1,134.72 every month (the last instalment is five pesewas less, ignored here); loan and equipment in January.

(Opening cash in January is GH¢3,000. Each closing cash = opening + cash in + loan and equipment − operating payments − instalment. Example, January: 3,000 + 5,950 + 2,000 − 6,760 − 1,134.72 = 3,055.28.) The lowest cash is GH¢1,925.84 in March, when sales are still low and the permit is due. Year totals: sales GH¢107,500; materials GH¢37,625; Modified Taxation GH¢3,225.

Prove it with profit. Net profit before the owner's wage = sales 107,500 − materials 37,625 − staff 24,000 − overheads 10,800 − tax 3,225 − permit 120 − depreciation 2,000 (10,000 ÷ 5 years) − loan interest 1,616.59 = GH¢28,113.41. Take away the owner's wage 14,400 to get 13,713.41. Add back depreciation 2,000 (no cash), take off the December debtors 975 (15% of 6,500, not yet collected), add the loan 12,000, take off the loan principal repaid 12,000 and the equipment 10,000: 13,713.41 + 2,000 − 975 + 12,000 − 12,000 − 10,000 = 4,738.41. The cash went from 3,000 to 7,738.36, an increase of 4,738.36. The five-pesewa difference is the instalment rounding. The forecast and the profit agree.

Now stress it. If every month's sales are 20% lower, with the same wages and overheads and the same loan, the closing cash is January 2,397.28; February 822.56; March −624.16; and the cash continues to fall to about −5,736 by September (author's calculation with the same assumptions). The plan works only if sales hold. A bank officer would ask what you will do. Possible levers: employ one seamstress until sales are steady, lower the owner's wage for the first months, ask for deposits of 50%, buy cloth for each order only, and borrow less. Rerun the forecast with each lever and show the result. Present both the main forecast and the stressed one.

Capstone: present to a panel

What to bring: (1) the one-page plan; (2) the 12-month cash forecast and its stress test; (3) your latest month-end file with the three statements, reconciliations, ratios and tax diary; (4) your price list and costing sheets; (5) your registration file; (6) a loan pack or funding request; (7) your quality and fraud-control checklist; (8) the succession and ethics note.

The presentation (10 minutes, then 10 minutes of questions): the customer's problem and your offer (2 min); proof (portfolio, first customers, 1 min); the numbers: prices, break-even, forecast and stress test (3 min); money: funding, loan schedule, cover (2 min); risks and how you will manage them (1 min); the ask (1 min).

Questions a panel may ask: Which month do you run low on cash? What happens if sales fall by a fifth? How did you set your price and what is your margin? How will you repay the loan from your forecast? Which taxes will you pay and when? How do you know your stock is not being lost? What if you are ill for a month? Show me where this number comes from.

What the assessor looks for: every figure traceable to a document or a stated assumption; books that balance; a forecast that adds up; honest risks; taxes and licences named correctly with their sources; and a plan that the trainee can explain without reading.

1. State the accounting equation and the rule for increasing an asset and an expense.
2. Name three errors a trial balance cannot find.
3. Why is a customer's deposit a liability and not a sale?
4. Write the formula for straight-line depreciation.
5. Name the three sections of a cash-flow statement.
6. Name two items found in a bank reconciliation and say which needs a journal entry.
7. FIFO or average cost: which gives higher profit when prices are rising?
8. What are the SSNIT split and the first PAYE band for 2026?
9. By which day must PAYE be paid, and VAT?
10. How do you work out debtor days?
11. How long must records be kept, and under which Act?
12. What is the difference between a flat-rate and a reducing-balance loan?

Best next reads: the GRA pages on PAYE, VAT and Modified Taxation; the ORC fee page; the SSNIT employer page; the GEA Business Advisory Centre in Takoradi; the hub's Money Skills Level 2 and Entrepreneurial Thinking Level 2.

What this module does not cover: company audits and statutory accounts, corporate tax computation, transfer pricing, import and export finance, shares and stock markets, current Takoradi microfinance rates and insurance premiums (get written quotes), and trade-specific licence fees (ask each agency).

Every source used in this manual is listed, with links, in the Teacher Copy.