Why good documentation matters

In a world which is highly regulated, it is important to document both yourself as an individual and your business. Undocumented individuals and businesses run the risk of being locked out of opportunities, what the Acholi say, “itto ki ngwece (you only get to smell the food but not eat it).

In the year 2006, the government of Kenya floated shares of a state parastatal on the Nairobi Stock Exchange. It was a very lucrative investment opportunity which many Ugandans benefited from. But one Ugandan woman missed the opportunity to invest because she lacked a credible identification document. More recently, a lady tweeted that her bank account had been blocked pending production of a copy of her national ID. The lady unfortunately did not have a national ID and possibly spent some days begging from friends as her own money stayed out of reach.

When the government came out with the idea of issuing national IDs, several people refused to apply for political or ideological reasons. Whoever took that route must carefully weigh the cost of not having a Ugandan national ID. Now that cost is big. There are many people in Uganda who cannot produce a document to prove their existence. The problem with that kind of existence is that such a person will easily be locked out of formal financial and business transactions.

Similarly, when you engage in business you should produce documentary evidence of that business. There are times when prospective clients and investors will ask for such evidence. Some of the simple but important actions you can take to document your business include: registering the business, operating a bank account dedicated the business. Additional documentation measures is to prepare annual audited accounts and always ask a satisfied client to give you a reference letter on completion of a business transaction.

James Abola is a business and finance consultant. Email: [email protected]