A top accountant is questioning why small businesses with less than $50,000 in gross sales should be exempt from proper record keeping, arguing it stunts the growth of business and promotes bad practices.
Raymond Winder, the managing partner at Deloitte & Touche (Bahamas), said the exemption is being seen with a measure of "concern".
For starters, he told Guardian Business that the exemption itself makes it difficult for the government to even know if a firm did not exceed the $50,000 mark.
"In my view, any organization that is licensed by the government should keep some books on record. By doing that, it serves as a basis to understand what they are doing to further improve their business," he argued.
"And if you're not tracking your business, how do you move from a small business to a big one?"
The question is timely, as the government pushes forward on a revised Business License Act that enforces better record keeping.
According to Ryan Pinder, the minister of financial services, the purpose of the new legislation is to come more in line with the Organization of Economic Cooperation and Development (OECD) to ensure compliance.
Pinder, who is also the minister for manufacturing and trade, said he actually agrees with Winder.
"I think he is right. However, the culture we are at, especially with small companies in the economy that are cash based, the culture is they don't keep proper records," he explained. "We didn't want it to be a barrier to certain businesses so in the companies act, we modeled it after the Business License Act threshold. But that is not to say we don't encourage best practices."
The minister said the legislation is really not intended for these small businesses.
"The ambition is always for them to grow to medium or big businesses," he added. "If you are seeking capital you'll need to present these types of records."
In The Bahamas, businesses with under $50,000 in turnover are only required to pay a nominal fee for their license. For his part, Winder told Guardian Business that the lack of standards for smaller businesses only prevents growth and fails to encourage them to take positive steps.
There are also other instances where record keeping becomes useful, such as the recent Road Works Relief Plan debacle.
Following the disastrous project in New Providence, whereby hundreds of businesses lost money or shut down entirely, entrepreneurs have been unable to prove their losses.
"Records are always important," he said. "One of the fundamental infrastructures to be in place as we move towards taxation is record keeping. Poor record keeping leads to poor decisions on how to tax and who not to tax. Poor record keeping also leads to the inability to truly make people accountable."

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