Keeping Good Business Records
Records File paid bills, canceled checks and/or bank statements, and other business documents where you can easily find them. Some people use manila folders or an accordion file divided into types of expenses, ie. "car', "utilities", "entertainment", and so on.
At a minimum, stuff receipts in the proper folders throughout the year and total them up at tax time. Staple the adding machine tape to each folder or stack of receipts. If this works, good for you!
An adequate recordkeeping system for a small business typically includes:
- Check register - preferably from a separate bank account for your business
- Summary of receipts of gross income - totaled either daily, weekly, or monthly
- Monthly summary listing of expenses
- Disbursements record (check register or actual expense journal) showing payments of bills
- Asset purchase listing (equipment, vehicles, real estate used in business), and employee compensation records (if you have workers).
Every time you spend money in the business (or once a week or month), note in your records the following:
a. A brief description of the business purpose of the transaction (office rent, new stapler, gas, etc.)
b. The amount
c. The date, and
d. Whom you paid (Chevron, Kinko's)
Keep all business records for at least six years, then make sure to properly destroy any sensitive information before disposal. You may elect to keep records longer, but the minimum required by the IRS is 6 years.
At a minimum, stuff receipts in the proper folders throughout the year and total them up at tax time. Staple the adding machine tape to each folder or stack of receipts. If this works, good for you!
An adequate recordkeeping system for a small business typically includes:
- Check register - preferably from a separate bank account for your business
- Summary of receipts of gross income - totaled either daily, weekly, or monthly
- Monthly summary listing of expenses
- Disbursements record (check register or actual expense journal) showing payments of bills
- Asset purchase listing (equipment, vehicles, real estate used in business), and employee compensation records (if you have workers).
Every time you spend money in the business (or once a week or month), note in your records the following:
a. A brief description of the business purpose of the transaction (office rent, new stapler, gas, etc.)
b. The amount
c. The date, and
d. Whom you paid (Chevron, Kinko's)
Keep all business records for at least six years, then make sure to properly destroy any sensitive information before disposal. You may elect to keep records longer, but the minimum required by the IRS is 6 years.