Kenyan business decisions, compared

For a shop, duka or restaurant collecting payment at the counter, a Buy Goods Till is the cleaner fit: customers are not charged to pay and the flow is fast. Paybill works better when customers need to include a reference, like paying a bill, school fees or rent.

Pochi is a free, instant starter for a one-person business that just wants customer payments separate from personal money. A Till is for a shop with staff, receipts and growth plans.

M-Pesa is safer, easier to reconcile and creates a digital record. Cash is universal and has no transaction fees, but it leaks through miscounting, theft and informal credit. Most Kenyan shops run both and win by tracking each clearly.

M-Pesa wins on speed and ubiquity for everyday business payments. Bank transfers win on cost for large amounts and for sending money between businesses with bank accounts. Most Kenyan SMEs use M-Pesa for daily operations and bank transfer for payroll and supplier settlements above a threshold.

A Till is the right tool for a physical counter: fast, no integration needed, works on any phone. payment prompt is for a digital product, app or online checkout where you trigger the payment request programmatically. Most physical shops should use a Till.

They answer different questions. The M-Pesa till statement shows money that arrived on the till; the POS report shows what was sold, to whom, by which cashier, and how it was paid, including cash and card. Use the statement to verify money movement and the POS report to run the business, and reconcile the two so nothing leaks between them.

eTIMS has replaced ETR as the current KRA system. The ETR machine is the old hardware box; eTIMS is the new software that runs on a phone, POS or dedicated terminal. If you are setting up compliance today, set up eTIMS, not an ETR machine.

TIMS was KRA's first digital invoice system. eTIMS superseded it. If you are on TIMS, you need to migrate to eTIMS. If you are setting up for the first time, you are going straight to eTIMS.

VSCU is the right choice for most businesses using POS or billing software: it runs in the cloud and needs no extra hardware. OSCU is the physical device route, suited to businesses that want a standalone unit separate from their software.

eTIMS Lite is KRA's simplified option for small, low-volume taxpayers who issue a small number of invoices manually. Full eTIMS, integrated into a POS, is right for any business with a busy counter, multiple sales a day or the need for stock and M-Pesa in the same flow.

A VAT invoice issued through eTIMS is a legal tax document with a KRA control number that a buyer can use to claim input VAT. An ordinary receipt is proof of payment only. Any VAT-registered or eTIMS-enrolled business must issue the tax invoice, not just a receipt.

A POS gives you live stock, automatic eTIMS, M-Pesa matched to every sale and margin per product. A notebook costs nothing upfront but hides shrinkage, misses eTIMS, loses credit records and cannot tell you what is actually selling.

Cloud POS is almost always the right choice for a Kenyan SME: no server to maintain, data backed up automatically, accessible from any device, and it improves without you doing anything. Local POS requires you to manage a server and loses the data if the hardware fails.

For most Kenyan SMEs, a mobile POS on a phone or tablet is the best starting point: no fixed hardware to buy, works offline, and you can take it to the customer. A fixed terminal makes sense for a high-volume counter that needs a dedicated till point.

A free POS app can ring sales, but for a Kenyan business the gaps show quickly: KRA eTIMS filing, M-Pesa reconciliation, hardware and support are usually missing or paid extras. A paid POS makes the cost predictable and the compliance automatic. Free works for testing the waters; paid works for running a business that must file every sale to KRA.

A cash register stores money and adds up sales; an Android POS terminal runs the business. For a Kenyan shop the deciding factor is compliance: a register cannot file KRA eTIMS invoices, reconcile M-Pesa or track stock, so the drawer alone leaves you doing all of that manually. Keep a drawer for cash by all means, but the till itself belongs to the previous era.

Barcode scanning is faster, more accurate and scales to thousands of items. Manual entry is fine for a shop with a handful of products but becomes a source of counting errors and shrinkage once you carry more than 50 to 100 SKUs.

Gross profit tells you if your pricing and cost of goods are healthy. Net profit tells you if the whole business is healthy after rent, salaries and every other expense. Both matter, and watching only one hides problems.

Markup is calculated on cost; margin is calculated on selling price. They sound interchangeable but give very different numbers. Most Kenyan shopkeepers think in markup when pricing and wonder why the margin report looks lower than expected.

A business can be profitable on paper and still run out of cash. Profit is the difference between revenue and costs over a period. Cash flow is the money actually in the account. More Kenyan businesses close from a cash-flow crisis than from a profit problem.

A sole proprietorship is simpler, cheaper and fine for most small Kenyan businesses. A limited company gives liability protection, looks more credible to corporate buyers and banks, and is usually the right step once you are hiring staff or winning contracts.

VAT is a tax on sales collected from customers and paid to KRA. PAYE is a tax on employment income deducted from employee salaries. Both are paid to KRA but they are entirely separate obligations collected from different sources.

Zero-rated goods have a 0% VAT rate, so the seller charges no VAT but can still claim input VAT on related purchases. Exempt goods are outside the VAT net entirely, so the seller cannot charge VAT and also cannot claim input VAT on related costs. The difference matters for your cash flow and your eTIMS setup.