Simplified Accounting System for Small Businesses in Cameroon

In Cameroon, all businesses with a turnover of 10,000,000F and below 50,000,000F fall under the Simplified Tax System category. These businesses have to prepare their accounts to meet the basic cash flow requirements. The Simplified Accounting System requirements are set by the OHADA Uniform Act Relating to Accounting Law and Financial Information.

The rules are here are simple and straightforward since the business is focused on tracking cash flow without excessive details. The goal is to help small business owners keep precise records. This also ensures they stay compliant with the law.

What’s Expected in the Simplified Accounting System?

Businesses in this category must keep basic cash flow records. This means recording every instance of cash flowing into and out of the business.

Unlike the detailed ledgers required for larger companies, this system keeps things simple: it’s all about tracking the essentials.

What to Record vs. What Not to Record

Example Scenario: A Local Electronics Store

Let’s consider “QuickFix Electronics,” a store in Douala that repairs and sells electronics. They have been making around 30,000,000F per year, so they qualify for the simplified system.

Here’s what they should record:

Sales Income

Every sale, whether it’s a repair or a product sale, should be recorded. If QuickFix sells a smartphone for 200,000F, they need to note this amount in their cash flow records. They should also record amounts if they repair a laptop for 50,000F.

When it comes to inventory, money spent on goods bought for resale, maybe spare parts are recorded. For instance, QuickFix buys smartphone cases for 500,000F, the exact amount needs to be recorded under cash outflow.

Operational Expense

Operational expenses like rent, electricity, or internet bills are recorded instantly. This happens when the deal is carried out in the cash outflow.

Read Also: Simplified Taxation System: Monthly Tax Calculator Cameroon

Same should be done for salaries or wages. For example, if all salaries paid for the month is 100,000F, QuickFix must register it as cash outflow instantly. This occurs right away when the deal is carried out.

Tax Payments

Taxes paid to the government should be documented.

Here’s what you don’t need to record when using the simplified accounting system:

Detailed Depreciation of Equipment: Unlike larger businesses, they don’t have to record the gradual loss in value of their tools. These tools include items like laptops or store fixtures.

Non-Cash Transactions: For example, the shop owner lend money to a friend from personal funds. If the friend later buys a laptop from the store, it does not need to be recorded.

Inventory Tracking in Detail: They don’t need to record every item added or removed from inventory. They only need to record the total cost of purchases.

Why Keep Cash Flow Records?

When QuickFix Electronics keeps a basic cash flow record, they get a snapshot of their financial activity. They can see how much they’re making versus spending, which helps with budgeting and tax reporting. It also means if there’s ever an audit, their finances are already clear and organized.

Sample Cash Flow Summary for QuickFix Electronics

Date	Description	Inflow (FCFA)	Outflow (FCFA)
Jan 1, 2024	Sale: Smartphone	200,000
Jan 5, 2024	Purchase: Inventory		500,000
Jan 10, 2024	Repair Service	50,000
Jan 15, 2024	Rent		300,000
Jan 20, 2024	Sale: Tablet	150,000
Jan 30, 2024	Salary Paid		100,000

Keeping track of these inflows and outflows fulfills legal requirements. It also offers QuickFix Electronics a clear financial roadmap.

Understanding and meeting these accounting obligations can give you confidence. Think of it as a foundation—strong, steady, and supportive. When done right, it helps you focus on what you do best. This means building a successful business.

Thinking about setting up a business? At OpenHub Consulting, we don’t just help you with company incorporation. We also guide you through compliance with Cameroon’s tax and accounting standards. From choosing the right tax regime to understanding OHADA requirements, we’re here to simplify the journey. Contact us today to get started on the right track!

Read Also: A Review of the Cameroon Tax System