Business record management or bookkeeping might be of low priority compared to other revenue generation activities, however regular record management not only makes business reports more sensible, but can prove a real stress relief during tax submission. Here’s what you can do to make record management easy:
- Maintain separate accounts for business and personal provisions. It is very essential to differentiate the two and it is not simple. Verify and find out legitimate business expenses and which cannot be put under business expenses.
- Get receipts or invoices for all business expenses and keep them in a monthly file – at the end of the month attach these to your bank statement, and make sure none are missing. Use this information to enter into you record keeping system or to give to your expert book keeper.
- Use a separate credit card for business related expenses. It will be easier for management of records.
- Maintain proper order and filing system for all records. It will be waste of time to hunt and search of document before the tax preparation season. Get organized before the start of fiscal year and keep year wise records of all financial and business relevant transactions.
- Keep proper documentary record of assets purchased which might include vehicles, equipment, real estate etc relevant for business.
- Maintain clear employee compensation records.
- Keep your tax records year wise and up to date. It is easiest to keep these broken down by month, and file them in plastic sleeves in a ring binder or in manila folders.
- Keep a log of your business travel in your vehicle. Note the kilometer reading on the odometer at the beginning of the financial year and then enter the kilometers by date each time you use the vehicle for a business purpose.
All of the above activities are required to avoid mistakes and penalties when preparing accounts. Set aside few hours every week to maintain systematic records. Like a lot of the administrative business related to running a business, they just require establishing good habits and persistence. But if you apply these rules of good record management now and follow through, it will create a positive difference during tax season and your accounting will be easier all year long.
If you are still very pressed for time, outsource bookkeeping work for as low as 15 to 20$ hourly charges to get the required back office support to get your business organized. Established bookkeeping service providers offer these services online too and you can have access to your data 24×7 from anywhere. This could be easy to maintain and manage.
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