Bookkeeping for Small Business in Nigeria: A Simple Guide…

Money comes in all day. A customer pays by transfer, another pays cash, the POS beeps twice, and you buy more stock. By evening the drawer is full, but you are not sure if you made money today or just moved it around.

That is the problem bookkeeping for small business in Nigeria solves. It is a simple daily habit: write down every naira that comes in and every naira that goes out. Do that, and you will know your real profit, be ready when the tax office or a lender asks questions, and stop guessing.

This guide shows you how, using a notebook, a free spreadsheet or an app. You get a daily routine, a worked profit example in naira, and the records the new tax laws expect you to keep.

In short:

Bookkeeping means writing down all money in and out of your business, every day, in one place.

Keep business money in a separate account and pay yourself a fixed "salary".

A notebook works. Google Sheets works better. Pick one and stay with it.

Record POS payments and transfers from your alerts and statements, and include the charges.

Nigeria's 2025 tax law says everyone must keep business records, in English, for at least six years, even if they owe no tax.

What bookkeeping for small business in Nigeria means

Bookkeeping is recording every money movement in your business in an organised way. The record is called your books.

Think of the exercise book a mama put owner keeps under the counter. Every morning she writes what she bought: rice, pepper, gas. Every evening she writes what she sold. At month end she adds it all up. That is bookkeeping. A spreadsheet just does the adding for you.

Bookkeeping is not the same as accounting. Bookkeeping is the daily recording. Accounting is what an accountant does later with your records: reports, tax and advice. Good books make your accountant cheaper.

Why bookkeeping matters

You know your real profit. Profit is the money left after paying for everything the business used. Selling ₦600,000 in a month means little if your goods, transport and rent cost ₦580,000.
You can plan your cash. Cash flow is the timing of money coming in and going out. You can make profit on paper and still be unable to pay a supplier on Friday because customers owe you.
Tax is easier. The new tax laws, in force since 1 January 2026, expect every business to keep records. The Federal Inland Revenue Service is now the Nigeria Revenue Service (NRS).
Lenders and big customers trust you. Loan, grant and contract forms usually ask for records or a bank statement.
You catch theft and waste early. Missing stock or "forgotten" transfers show up when your books do not balance.

Step 1: Separate business money from personal money

This is the most important step, and the one most owners skip. When shop money and house money share one account, school fees, a wedding contribution and stock all come from the same pot. You can never tell if the business is doing well.

Open a business account. If you are registered with the Corporate Affairs Commission (CAC), open one in the business name. If not, open a second personal account used only for business. Our guide to registering a business name in Nigeria explains how to get your CAC certificate.
Send all business income there. Give customers only that account number, and bank cash sales every day or two.
Pay yourself a fixed amount. Choose a monthly "salary", say ₦150,000, and transfer it on the same date each month. Anything extra you take is drawings: money the owner takes out of the business for personal use. Write it down.

Step 2: Decide what to record

Every entry needs these columns:

Column	What to write	Example
Date	The day money moved	14 October 2026
Description	What it was for	Sold 2 cartons of noodles
Category	A group name	Sales
Money in (₦)	Sales and other income	19,600
Money out (₦)	Purchases and expenses
Method	Cash, transfer, POS	Transfer

A category groups similar items so you can see where money goes: "Stock", "Transport", "Rent", "Data and airtime", "Wages", "Fuel and power", "POS and bank charges".

Record as income: cash sales, transfers, POS card payments, payment-link sales, and credit sales (goods given now, paid later). Mark credit sales "unpaid" the same day.

Record as expenses: stock, rent and market dues, transport and delivery, fuel and electricity tokens, wages, data and airtime, packaging, and every bank, POS or stamp duty charge.

Keep receipts (any written proof of payment, including a supplier's handwritten note or a transfer screenshot) for bigger expenses. Photograph them into a folder named by month.

Step 3: Choose how you will keep your books

The right tool is the one you will use every day.

Option	Cost (as of October 2026)	Best for
Notebook (cash book)	A few hundred naira	Very small, mostly cash businesses
Google Sheets	Free with a Gmail account	Most businesses with transfers and POS
Bookkeeping app	Free plans exist; paid plans vary	Businesses sending many invoices or with staff

A notebook

Rule a page into the columns above, one page per day, with daily totals at the bottom. It is fine for starting, but the maths is all on you and a lost book means lost records. Photograph each full page weekly.

Google Sheets (our pick for most owners)

Google Sheets is Google's free spreadsheet app: a page of boxes in rows and columns that adds numbers for you.

Install Google Sheets and open a blank sheet.
Type the six headings in row 1.
Put each sale or expense on its own row.
A formula is an instruction that tells the sheet to do a sum. In box D501 (the bottom of the "Money in" column), type =SUM(D2:D500). In box E501, type =SUM(E2:E500) for "Money out".
In box F501, type =D501-E501 to see money in minus money out.

Name each tab by month. The file saves to Google Drive, so a stolen phone does not take your records with it.

Stuck on a formula? A free AI (artificial intelligence) chat tool, such as ChatGPT, is a program you type questions into, and it can write the formula for you. Our guide on using ChatGPT for your business on your phone shows how to ask, and our AI prompts for Nigerian business owners include money prompts to copy. Test any formula on numbers you can check by hand, and never paste customers' account numbers or BVNs (Bank Verification Numbers, the 11-digit number linked to each person's bank accounts) into AI tools.

A bookkeeping app

Apps let you record sales, send invoices (bills that tell a customer what they owe and how to pay) and see reports. Zoho, for example, lists a free plan for micro businesses on its Zoho Books page for Nigeria, as of October 2026, with limits. Before choosing any app, check the free plan's limits, whether you can export (download) your records, and who can see your data.

Step 4: Record POS payments and transfers correctly

Most Nigerian shops now earn more by transfer and POS than cash. Every payment leaves a trail, which helps, but there are traps.

Use your own alerts, not memory or screenshots

A bank alert is the notification your bank sends when money moves. A bank statement is the full list of movements for a period. At closing time, copy every inflow from your banking app into your books. Never release goods based on a customer's screenshot, because fake transfer screenshots are common.

Record the charges

POS charges: your provider takes a fee from card payments. It depends on your provider and plan, so read it from your settlement report.
Transfer fees: your bank may charge a small fee when you send money.
Stamp duty: a small government charge on certain transactions. Since 1 January 2026, the sender pays ₦50 on electronic transfers of ₦10,000 and above. Transfers below ₦10,000, salaries and transfers within the same bank are exempt, according to Nairametrics' report on the new stamp duty rules. When you pay suppliers, that ₦50 is your cost.

Small charges add up. Sixty supplier transfers above ₦10,000 in a month cost ₦3,000 in stamp duty alone.

Check settlement

Settlement is when POS or online payment money actually lands in your account, sometimes the next day and minus charges. Record the sale on the day it happened, then confirm the money arrived.

Reconcile weekly

Reconciling means ticking your bank statement against your books to make sure they match. Anything on the statement but not in your books is a missing record.

Step 5: A daily, weekly and monthly routine

Every day (10 minutes at closing): count the cash, open your banking app and POS report, record every sale and expense, note who owes you and whom you owe, and photograph receipts.

Every week (30 minutes): reconcile with your statement, bank your cash, chase customers who owe you, and check fast-moving stock.

Every month (1 to 2 hours): total income and expenses by category, work out your profit (example below), save your bank statement as a PDF in a "Records" folder, pay yourself, and compare with last month.

Worked example: Chika's provisions shop in Enugu

Take Chika, an illustrative example, who runs a provisions shop near Ogbete Market in Enugu. Here is her October 2026.

Sales: cash ₦420,000, transfers ₦610,000, POS ₦270,000. Total: ₦1,300,000.

Cost of goods sold is what Chika paid for the items she actually sold, not everything she bought. She started with ₦350,000 of stock, bought ₦980,000 more, and counted ₦390,000 left on 31 October.

Cost of goods sold = ₦350,000 + ₦980,000 minus ₦390,000 = ₦940,000

Gross profit (sales minus cost of goods sold) = ₦1,300,000 minus ₦940,000 = ₦360,000

Running costs	Amount (₦)
Rent (monthly share)	50,000
Shop assistant	60,000
Transport to market	28,000
Generator fuel	35,000
Data and airtime	8,000
POS, bank charges and stamp duty	9,500
Nylon bags	6,000
Market levy	3,500
Total	200,000

Net profit (gross profit minus running costs) = ₦360,000 minus ₦200,000 = ₦160,000

What Chika learns:

She sold ₦1.3 million but kept ₦160,000. Without books she might spend as if she made far more.
Her ₦150,000 salary, taken from profit as drawings, is barely covered. Little is left to grow.
Fuel costs more than transport. A solar lamp and fan might pay for themselves.

The records the tax law asks you to keep

Four new tax laws took effect on 1 January 2026, including the Nigeria Tax Act and the Nigeria Tax Administration Act. Here is the record keeping part in plain words.

Everyone must keep books

Section 31 of the Nigeria Tax Administration Act 2025, as published in the official gazette, says every person must keep books or records of accounts whether or not they are liable to pay tax. The records must:

hold enough detail of all transactions for your tax to be worked out;
be in English, or, if asked, you must provide an English translation certified by a sworn translator, at your own cost; and
be kept for at least six years after the year of assessment (the tax year) the income relates to.

Section 102 sets a penalty for not keeping books, or not producing them when asked: ₦10,000 for an individual and ₦50,000 for a company.

What to keep

As of October 2026, the NRS has not published a simple checklist for small businesses. A sensible set is:

your sales and expense records;
monthly bank statements (as PDF files, the download format your bank app offers) for every business account;
POS settlement reports;
receipts and invoices for purchases, and invoices you sent;
stock counts, especially at year end;
staff payment records; and
your CAC certificate, Tax ID (the number that replaced the old TIN) and tax filings.

Keep them in Google Drive and on a flash drive.

Small business relief still needs records

Companies: section 11 says every company must file a yearly tax return (a form that reports your income to the tax office), even if it owes no tax. A small company may attach a statement of accounts signed by the owner instead of audited accounts (accounts checked and signed by an outside accountant). That statement comes from your books. In late 2025, FIRS officials explained that small companies pay 0% company income tax from 2026 but must still file, as Nairametrics reported. Section 101 sets a penalty of ₦100,000 for the first month a return is late.
VAT: VAT (value added tax) is a 7.5% tax added to many goods and services. A "small business" does not have to register for, charge or file VAT. The Nigeria Tax Administration Act, as gazetted, defines that as yearly turnover (total sales) of ₦50 million or less and fixed assets (things the business owns and keeps using, such as equipment, vehicles or a shop) under ₦250 million. Professional services, such as lawyers and accountants, do not qualify. Some explainers quote ₦100 million instead, so confirm your limit with an accountant. Either way, your books decide which side you fall on.
Business name owners: profit from a business name is taxed as your personal income, usually by your state tax office. As of October 2026, the first ₦800,000 of yearly taxable income is taxed at 0% under the Nigeria Tax Act.

Your exact position depends on your structure, turnover and state. Confirm with a chartered accountant or the NRS.

When to get an accountant

You can do your own bookkeeping. Get a qualified accountant when your sales approach the VAT or small company limits, you run a limited company, a bank asks for financial statements, you employ staff and need to handle PAYE (tax taken from salaries), or a tax office writes to you.

Look for members of ICAN (Institute of Chartered Accountants of Nigeria) or ANAN (Association of National Accountants of Nigeria). Ask for the fee and exactly what they will file before you agree. Neat monthly records lower the bill.

If you are curious how free AI tools can help with the boring parts, start with our practical starter guide to AI for small businesses.

Mistakes to avoid

Recording sales but not expenses. Fuel, data, nylon bags and ₦50 charges are where profit leaks.
Treating sales as profit. ₦1 million in sales is not ₦1 million in your pocket.
Paying personal bills from the business account without recording them as drawings.
Trusting transfer screenshots. Confirm every payment in your own app.
Waiting until month end. Ten minutes a day beats a Sunday of guessing.
Keeping one copy. A stolen phone should not wipe out six years of records.
Skipping the stock count. Without it you cannot work out real profit.

Frequently asked questions

Do small businesses in Nigeria need to keep books?

Yes. The Nigeria Tax Administration Act 2025 says every person must keep records of accounts, whether or not they owe tax. Books are also the only way to know if you are really making profit.

What is the easiest way to start?

A free Google Sheet with six columns: date, description, category, money in, money out and method. Fill it at closing time every day. A ruled notebook also works if you photograph the pages weekly.

How long should I keep business records?

At least six years after the year of assessment the income relates to, under section 31 of the Nigeria Tax Administration Act 2025. Keep bank statements, receipts and sales records, with a backup copy.

Can I use my personal account for my business?

At the very start, perhaps, but it confuses your books and large inflows can raise questions from banks and tax officers. Open a separate account as soon as you can, and move to a business account once you register with the CAC.

Words to know

Books: your record of all money in and out.
Gross profit: sales minus the cost of goods you sold.
Net profit: gross profit minus running costs.
Cost of goods sold: what you paid for the items you sold in a period.
Cash flow: the timing of money coming in and going out.
Drawings: money the owner takes for personal use.
Reconciling: checking your books against your bank statement.
Settlement: when POS or online payments reach your account.
Turnover: total sales over a period, usually a year.
NRS: Nigeria Revenue Service, the federal tax agency that replaced FIRS.

Next step

Tonight, open Google Sheets, create the six columns from Step 2, and record today's sales and expenses. Repeat every day this week, and on Saturday compare your sheet with your bank statement. In a month you will know your real profit.

For more money guides, browse our finance and accounting section.

Bookkeeping for Small Business in Nigeria: A Simple Guide