Record keeping for Zimbabwean SMEs: what to keep, and for how long

Record keeping is the least interesting obligation a business carries and the one that determines the outcome of almost every review it will face. A deduction you cannot support is a deduction you do not get. An input tax claim without a valid tax invoice is not a claim. A transaction you cannot explain is, from an examiner’s position, a transaction that did not happen the way you say it did.

Two separate sources of obligation

Zimbabwean businesses keep records for two distinct reasons, and the requirements do not perfectly overlap.

The first is company law. The Companies and Other Business Entities Act [Chapter 24:31] requires registered entities to keep accounting records sufficient to show and explain their transactions, disclose their financial position with reasonable accuracy at any time, and enable financial statements to be prepared. It also requires statutory registers and records of company decision-making to be maintained.

The second is tax law. The Income Tax Act and the VAT Act each impose their own record-retention requirements, tied to the periods within which ZIMRA may assess or reassess you. These retention periods are what actually determine how long you keep things.

The records themselves

Accounting records

• General ledger, trial balances and journals, including narration explaining each journal
• Sales invoices issued and purchase invoices received, in sequence
• Bank statements for every account, and reconciliations to the ledger
• Cash books and petty cash records with supporting vouchers
• Fixed asset register showing cost, date of acquisition, depreciation and disposals
• Inventory records and stock-count sheets, including the count instructions used
• Debtors and creditors ledgers with ageing

Tax records

• Valid tax invoices supporting every input tax claim, with the particulars the VAT Act requires
• VAT account reconciling returns filed to the ledger for each tax period
• Payroll registers, PAYE computations and benefit valuations
• Copies of returns filed and acknowledgements of submission
• Proof of payment for every remittance, matched to the return it settles
• Tax computations with the reconciliation from accounting profit to taxable income

Statutory and governance records

• Certificate of incorporation, constitutive documents and any amendments
• Registers of members, directors and secretaries
• Minutes of board and shareholder meetings, and written resolutions
• Signed contracts, leases and loan agreements
• Licences, permits and sector-specific registrations

Multi-currency records

Zimbabwe’s currency environment adds a requirement most record-keeping guidance written elsewhere does not cover. Where a business transacts in more than one currency, the record must show the currency of the original transaction, the rate applied on conversion, and the source of that rate.

Recording only the converted figure destroys information you cannot reconstruct later. When a review asks how a balance was translated, “that is what the system produced” is not an answer. Keep the rate and its source alongside the entry.

Electronic records

Records may generally be kept electronically provided they remain accessible, readable and capable of being produced when required. That last condition is where businesses come unstuck. Records held only in a cloud accounting subscription that has lapsed, or on a laptop that left with a former employee, are not records you can produce.

1. Keep an independent backup that does not depend on a single subscription remaining active.
2. Export a full trial balance and transaction listing at each year end, in a format readable without the original software.
3. Retain scanned source documents at a resolution where the required particulars remain legible.
4. Document who holds administrator access, and revoke it as part of the leaver process.

A filing structure that survives a review

The test of a filing system is not whether you can find something. It is whether someone who has never seen your business can find it, in your absence, within a few minutes. That is precisely the situation during an audit or a ZIMRA visit.

The structure we recommend to clients is simple: financial year at the top level, then function (sales, purchases, payroll, banking, tax, statutory), then period. Filing acknowledgements and proofs of payment live with the return they relate to, not in a separate "ZIMRA" folder. Anything that required judgement gets a short memorandum recording the reasoning at the time — not reconstructed two years later under questioning.