For many Kenyan businesses, most of the money arrives through M-Pesa. That is a gift for record keeping, because every payment has a code, a time, an amount and a name. But statements are only useful if you use them. Here is how to turn M-Pesa into a bookkeeping tool.

Use a till or paybill, not a personal number

A Lipa na M-Pesa till or a paybill keeps business receipts apart from your personal money, gives you proper statements and looks professional. Personal wallets mix everything and make it hard to explain deposits to KRA or a lender. See separating business and personal money.

What the statements give you

From the M-Pesa portal or app you can download statements for a date range with:

  • The transaction code
  • The date and time
  • The customer's name or number
  • The amount received or paid
  • Charges and the running balance

These are the evidence of your sales and expenses. Keep them for at least five years.

A daily routine

  1. Record each sale with the M-Pesa code, in a sales book. The free sales receipts book records the receipt number, item, amount and how it was paid.
  2. Reconcile each evening. Compare the till total with your sales record. The free M-Pesa till reconciliation matches every payment to a sale and shows what is unexplained.
  3. Cash up. For shops with both cash and M-Pesa, use the daily cash-up sheet to compare expected with counted.
  4. Withdraw to the bank regularly and record the transfer.

A monthly routine

  • Download the monthly statement and reconcile it to your cashbook; see bank reconciliation step by step.
  • Total sales for the month for your tax return.
  • Review failed, reversed and unmatched payments.

Why it matters for tax

KRA can compare the money going through your till with the sales you declare. If your records and your statements do not agree, you may face questions. If you pay turnover tax, you need the monthly total of gross sales, which comes straight from your records; see turnover tax for small businesses and the turnover tax calculator. If you are VAT-registered, the till total supports your return; see how to file a VAT return.

Guard against fraud

  • Give every customer a receipt or an invoice, and match it to the code.
  • Do not let staff use their own phones to receive business payments.
  • Limit who can see and withdraw the till balance.
  • Look at reversals and charges.

Freelancers and online sellers

Freelancers and online sellers can use M-Pesa statements the same way; see tax for freelancers and content creators and the freelancer tax calculator.

Keep the files safe

Save each month's statement as a PDF in a folder by year and month, and back it up. The tax records checklist and document log shows what else to keep, and how to keep business records for KRA explains how long.

M-Pesa records feed every return you file. See expenses small businesses can deduct for what counts as a cost and why invoices matter, and eTIMS and your expenses: why invoices now decide what you can deduct for the new expectations. The free simple cashbook turns the statements into a running balance.

Statement formats change. Check the current M-Pesa options for business accounts.

Common questions

Is an M-Pesa statement enough as a record? It is evidence of money moving, but it does not say what each payment was for. Match each entry to an invoice, receipt or sale, and add a note, so the statement becomes part of a complete record.

Should I use a till, paybill or personal number? A till or paybill keeps business money apart from personal money and gives you downloadable reports. A personal number mixes the two, which makes bookkeeping and tax harder.

How do I avoid payment fraud? Confirm each payment on the business app or portal rather than from a text message alone, reconcile every day, and limit who can reverse or withdraw funds.