Good bookkeeping for a small business in Nepal comes down to five habits: keep every bill, record every transaction the same week, separate business and personal money, reconcile the bank every month and close the books at the end of each fiscal year.
1. Keep every bill and receipt
Every sale and purchase needs a document — a tax invoice, a bill, a receipt or a bank record. Keep them together by month. If you are VAT-registered, your sales and purchase records must match the invoices you issue and receive.
2. Record transactions as they happen
Waiting until the year end turns bookkeeping into guesswork. Record income, expenses, purchases and payments weekly — or daily for a busy shop. Write the BS date from the bill, because Nepal's tax year follows the BS fiscal year.
3. Separate business and personal money
Use a separate bank account or wallet for the business. When the owner takes money out, record it as drawings, not as an expense. Mixing the two is the most common reason small-business profit figures are wrong.
4. Use a simple chart of accounts
Group every transaction into a small, consistent set of accounts:
| Group | Examples |
|---|---|
| Assets | Cash, bank, stock, money customers owe you |
| Liabilities | Loans, money you owe suppliers, VAT payable |
| Equity | Owner's capital, drawings |
| Income | Sales, service income |
| Expenses | Rent, salaries, electricity, transport |
See from transaction to financial statement for how these accounts become your reports.
5. Reconcile the bank every month
Compare your records with the bank statement. Every difference is either a missing entry, a duplicate or a bank charge you haven't recorded. Fix it the same month.
6. Track who owes you — and whom you owe
List unpaid customer invoices (receivables) and unpaid supplier bills (payables) with their due dates. Chasing the oldest receivable first is the fastest way to improve cash flow.
7. Close each fiscal year properly
At the end of Ashadh:
- count your stock,
- make sure receivables and payables are complete,
- run your trial balance, profit and loss statement and balance sheet,
- and keep the year's records safe for tax purposes.
Let software do the repetitive part
Accounting software such as KhataIN records each transaction once and builds the ledger, trial balance, profit and loss and balance sheet for you — with BS dates, fiscal years and Nepal VAT built in. Start free.