CORPORATE RECORD KEEPING, BUSINESS RECORDS, TAX RECORDS
If you have your own business good recording keeping is essential regardless whether you have incorporated or not. By keeping detailed business records you know how well your business is doing. Tax records are needed for filing your tax return. And corporate record keeping is absolutely required to maintain the viability of your corporation. We cover all here.
GOOD RECORD KEEPING – WHY IT IS SO IMPORTANT
Profits: Your business records can allow you to see where to cut expenses to increase your profit margin
Filing your taxes: If you have kept good records the job of preparing your tax return will be easier for you and your tax preparer. If your tax information is itemized you will be saving yourself from a nightmare as you are preparing your tax return. You may even find overlooked items to deduct, saving you tax money.
Tax audit defense: Good record keeping will help you support your tax deductions if you are audited. If you do not have evidence of a deduction at an audit that deduction would be disallowed.
CORPORATE RECORD KEEPING
If you have incorporated your business, you have certain corporate record keeping duties that you must perform.
Your record keeping is crucial for each and every Corporation or Limited Liability Corporation (LLC) you own. If you don’t take time to properly memorialize important decisions and meetings; you could run into trouble and …
Lose crucial tax benefits
Lose track of important decisions
Not be able to get a loan for your business
Be unprepared for an audit
Jeopardize the legal existence of your business as a separate business entity.
Become personally liable for corporate debts and liabilities
WHAT RECORDS DO I NEED?
You will need business bank account for both savings and checking. Another item that is very helpful is a duplicate deposit bank book.
Expenses: A business credit card will enable you to separate your business and personal expenses. By separating your business and personal income and expenses this information will be invaluable both for evaluating the success of your business and for preparing your taxes.
You will need a ledger showing your income and expenses. You need income documentation. The income documentation will be from invoices, bank deposit slips and a daily log of cash or money received.
For corporations: A corporate record book
For expenses your supporting documentation will be receipts, credit card statements, bank statements, invoices etc.
There is several record keeping products available in the market such as “QuickBooks”.