- Monitor the progress of your business
- Prepare any financial statements
- Identify the source of receipts
- Keep track of deductible expenses
- Prepare your tax returns
- Support items reported on tax returns
Which system works best? The quick answer is “the one that works for you.” Opting for expensive and elaborate recordkeeping software may not be the best choice if you’re just starting your business — and if your business is large and well-established, tossing paperwork into a shoebox will likely cause headaches at tax time.
The system you choose should be one that allows you to easily track your income and expenses and keep your business documents in an orderly fashion and in a safe place.
What to Keep?
Saving these items is a must as you’ll need them to prepare your tax returns (and as support for items reported on tax returns):
- Paid bills
- Deposit slips
- Cancelled checks
The links below are to sites that are great sources of recordkeeping information. They’ll help you determine exactly which items you need to keep to ensure your business runs smoothly — and legally!
- Moneywise Women Get Smart — Free monthly educational teleseminars on a range of financial topics.
- The IRS — Which records to keep, how long to keep them and why. Articles, videos, publications and answers to frequently asked questions.
- SCORE — This nonprofit resource partner with the U.S. Small Business Administration (SBA) provides info on local-area recordkeeping workshops and more.
- U.S. Small Business Administration — Information on how to manage your tax obligations, tax recordkeeping and more.