Good record keeping is an essential part of running and owning a business. It can make it easier to manage money, check staff records, contain information on salaries or dividends, as well as enable you to keep track of all of your business expenses. Not to mention that it is a legal requirement to keep records for your business.
To keep things legal, as well as keeping yourself organized, getting on top of your business records is a must. So here are some steps and some tips to help you get your records up to scratch.
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Know What You Need To Record
For completing things like a tax return, you will need to know what records they will want to see. So checking on that can be a good place to start. But as a general rule, invoices should be kept, as well as receipts.
This way you can keep track of what payments have gone into the business, as well as what payments have gone out of the business.
You can monitor your expenses this way, as well as the business’ bottom line. When all of these are kept and recorded, it should make the end of tax year report much simpler.
Get Apps To Help
The good thing about living in such a modern day and age is that we have the technology to help us with all of our record keeping. And you guessed it, there are apps for that!
You can use them to keep track of invoices, as well as other payments received. You can scan receipts on others, and it will calculate how much you can claim back as a business expense, for example.
It can be handy as it is a way to record everything in real time. It can make it easier to not miss anything; don’t let any payments or expenses slip through the net.
Keep Things Legal
As well as your bookkeeping and accounts, you will need to have records of staff members, clients, contractors, and perhaps even federal information.
If your business, or you as an individual processes, stores, or transmits information that falls into a Controlled Unclassified Information categories (or CUI), for federal or state agencies, then you need to make sure that what you store or process is up to scratch in the legal sense.
This could be a contract with the government or just other federal information. Being able to protect the data is a must.
Which is where something like NIST SP 800-171 comes in. This sets certain requirements for your business and the data that you hold. So it is worth checking what your current processes are or if you need to outsource to someone to help your business meet the requirements.
Keep Personal Finances Separate
No matter how large or small your business is, keeping it separate from your personal finances is really key.
Open a different account for your business and use that for your business funds and expenses. When the two get tangled up together, it can be confusing for all, especially when going through your records.