Everyone who owns a business, no matter how small or large, must diligently maintain their paperwork. It is important to keep track of items for tax purposes and much more. Decent record keeping can help you monitor the success of your business, keep track of your expenses and assets, and prepare financial statements.
While well-kept records can ensure your business remains healthy, bad record keeping can get you into trouble. Here are four ways you can make things easier for yourself and keep your records in good order:
1. Have a Good Accounting System in Place
Keeping good tax records is much easier when you implement a quality accounting system. If you want accurate tax records, you need proper accounting, and that all starts with the way your records are completed and organized. There is a plethora of accounting software out there that can make the process simple, but it may be a good idea to have an experienced accountant on the job instead.
2. Make Sure You Keep the Right Records
The type of business you own will determine the type of records you need to keep. In addition to your business’ purchases, sales, payroll, and other transactions, there will be many supporting documents you should keep. This may include:
- Cash register tapes;
- Deposit slips;
- Credit card receipts and statements;
- Travel and/or transportation expenses; and
- Documents involving employment taxes.
3. Know How Long You Need to Keep Records On-Hand
You cannot just wait a year and then throw everything out. There are specific rules you must follow to determine how long you must keep your records before you can get rid of them. The Internal Revenue Service tax code states you should keep your records for as long as they might be needed for administration of any part of the tax code. If you have employees, you must keep their records for at least four years. If you owe taxes, you must keep your records for at least three years.
Contact a Schaumburg, IL Employment Lawyer
While the way you keep your business’ records is up to you, make sure you keep precise records in accordance with all applicable laws. An Illinois employer records attorney can help ensure you follow all record-keeping standards. At the Miller Law Firm, P.C., we know how crucial keeping records is both financially and legally. Contact our office today to see how we can help your business thrive. Call 847-995-1205 to schedule a free consultation.