Business Recordkeeping Basics

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Any type of business requires extensive and organized recordkeeping. Having a good record keeping system is one of the things that can help make your business run more smoothly and efficiently. Good record keeping allows you to be able to take stock of valuable business documents and easily locate then when needed.

In having a recordkeeping system set up for your own business, you must first know what types of records that businesses usually keep. Basically, record keeping in a certain business is part of keeping the required documents for tax purposes. The type of business that you run would determine what types of documents and records that you need to keep.

Business Book Records

The summary of such records are usually found on the business books which may include the accounting journals and ledgers. These books show the gross income as well another financial information about the business. It is through these records that the IRS may be able to determine taxes owed by the business. For smaller businesses, the main source of records like these can be found in the business checkbook. Aside from that, businesses will also need to keep a record of their supporting business documents.

Supporting Business Documents

With every transaction, sales, purchases and wage payments made, businesses would usually get invoices and receipts which are considered supporting documents. These documents become the source of entries for the business books that you keep. It is also important to keep these supporting documents since they will support everything that you put into your business books. In cases where the IRS wanted some entries in the record books clarified, they usually ask for the supporting documents.

Gross Receipts

These receipts provide information of the income that you have received from your business. These should be kept as supporting documents since they show amounts as well as the sources that make up the income of your business. Some examples include, invoices, cash register records, bank deposit slips, receipt books, etc. A business should be able to keep a up to date record of such.

Purchases and Expenses

Records for purchases are also important since they provide information of the certain expenses that your business have incurred over a certain period of time. This can include the money spent on products being sold as well as the other accompanying expenses needed to run the business. Documents that may help provide the information for the books include account statements, invoices, canceled checks, cash register tapes, credit card statements petty cash slips, etc.

Assets

it is also important for businesses to keep records of assets. These are the properties such as machinery and other office equipment needed to run the business. There should be a record available to provide certain information about the assets that the business owns.

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