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Keep Good Records

Keep Good Records

Every person needs to maintain good records to lead a good life. Keeping good records is extremely important if seen from a professional perspective.

How can good records benefit one’s business ?

– Helps to record all expenses and reduces tax obligations

– Makes it easy to create accounts at the end of the year

– Provides relevant and useful information related to business and helps the business grow

– Identifies the strengths and weak points of one’sbusiness

– Helps to manage changes and improvements in business

– Makes it easy for one to apply for a loan or sell it’s business

– Helps to avoid over or under tax payments

– Helps one meet financial obligations like paying employees’ salary on time and creditors’ amount

To keep good records, one needs to take care of the following ways:

1. Do Not Default On Debts

One shouldn’t default on debts to maintain good records. Bad debts impact one’s credit score, creditworthiness and overall image of one’s business. If all this happens often, it can lead to significant damage to the image and operations of your business.

2. Monitor The Progress Of Business

One must have good records to check for the progress of business. Records show if your business is showing improvements or if it is stuck behind. It shows which items you are selling or what changes or additions one need to make. Good records increase the success rate of business as things get clear, and steps can be taken to overcome the shortcomings.

3. Timely Prepare Financial Statements

Good records help one prepare financial statements accurately. What comes under these are Profit and Loss statements and Balance sheets. These announcements help one manage your bank and lenders who can help one in dealing with business.

– A salary articulation will show the payment and costs of business for a particular time span.

– An accounting report will show the advantages, liabilities, and value of business on a specific date.

4. Identify Sources Of Income

One needs to identify what sources of income one has to keep good records. Records will help one identify all sources that generate income . This information will help one keep business receipts separate from non-business ones, and also, the taxable income separates from the non-taxable income.

5. Keep Track Of Expenses

If one does not record expenses when they are incurred and for what purpose, one cannot maintain records. One will forget about some expenses- big or small when ready to file for the tax return.

6. Prepare Tax Returns

You need good records to file for tax returns. These records support income, expenses, and credits. Usually, the same good records are used to monitor the progress and ongoing operations of business. This will also help one prepare financial statements for your business at the end of each year.

7. Check for premise in the property

Premise alludes to the measure of interest in the property for charge purposes. One needs this premise to monitor the increase and misfortune sum on deals, trade, and another attitude of property. It will also include deductions for depreciation, depletion, and general losses.

So, keeping good records of business is always a great idea to go ahead with.