Keeping good records is crucial for the success of your business. A proper business record helps you keep track of your business operations and discover ways for them to grow as well. Good record keeping goes hand in hand with accurate financial statements about your business. It should not be taken lightly. 

Recommended reading: Bookkeeping for Financial Planning

Record-keeping is the organized process of storing and managing information related to your business activities. This might include financial transactions, employee data, customer interactions, and more. Think of it as the memory bank of your business, holding crucial data that can be revisited when needed.

Benefits of Accurate Record-Keeping

So why is record keeping important, and why should you care about it as a business owner? 

1. It helps you claim all eligible expenses, potentially lowering your tax bill.

2. It makes it faster and easier to prepare your annual accounts.

3. It provides insights into what’s working well and what could be improved in your business.

4. It helps to ensure that you can pay your bills and employees on time.

5. Clear records can make it simpler to get a loan or find a buyer for your business.

6. It makes it easier to distribute profits to shareholders or handle profit and loss sharing in partnerships.

Ways to Maintain Good Record-Keeping

To ensure your records are up to par, consider the following:

1. Establish a clear record-keeping policy: Define guidelines for creating, storing, and disposing of records. This includes specifying what types of records need to be kept, how long they should be kept, and who is responsible for managing them.

2. Use a consistent naming convention: When naming files and folders, follow a consistent system that makes sense to you and others who may need to access the records. This will help you easily locate and identify the information you need.

3. Utilize technology effectively: Leverage technology to streamline record-keeping tasks. Use electronic filing systems, cloud storage solutions, and document scanning software to organize and manage your records efficiently.

4. Establish regular backups: Protect your records from loss or damage by implementing regular backup procedures. Create copies of your files and store them in a secure location, either physically or electronically.

5. Conduct periodic audits: Regularly review your record-keeping practices to ensure they are effective and compliant with any applicable regulations. Identify areas for improvement and make adjustments as needed..

Record-Keeping Requirements

Every business has different record-keeping requirements, often dictated by laws and industry standards. Generally, you should maintain:

1. Financial Records

Financial records are essential for any business, as they provide a clear picture of the company’s financial health. These records should be accurate, complete, and up-to-date, and they should be stored in a secure location. Some of the key financial records that businesses should maintain include: invoices and receipts, payroll records, tax documents, 

bank statements credit card statements, and financial reports.

2. Employee Records

Employee records are important for complying with labor laws and protecting the company from legal liability. These records should be kept confidential and stored in a secure location. Some of the key employee records that businesses should maintain include employment contracts, performance evaluations, attendance records, disciplinary records, and the I-9 form.

3. Customer Data

Customer data is valuable for marketing and customer service purposes. However, businesses must also be careful to protect customer privacy. Some of the key customer data that businesses should maintain include: customer contact information, purchase history

customer feedback, and customer service records.

Leverage the skills of an expert bookkeeper

Unless you’re a bookkeeper or you run an accounting business, doing your books yourself can drive you crazy. Additionally, when you run a business, you’ll hardly have time to look after the finances, and a trained bookkeeper will be able to avoid financial errors that you wouldn’t have noticed.

That leaves you with the best option: outsourcing it to a virtual bookkeeping expert. They can help you maintain accurate financial records, facilitate smooth financial operations, and provide you with a clear understanding of your financial position.

When you outsource your bookkeeping to virtual bookkeeping experts, they offer several advantages. They provide flexibility and convenience by working remotely, allowing businesses to access their services from anywhere. They can also offer cost savings compared to hiring an on-site bookkeeper.

EntreAdmin’s virtual bookkeeping experts can assist you in identifying areas of potential cost savings as well as areas where you may be overspending. 

EntreAdmin

At EntreAdmin, we understand the unique challenges that come with being a small-to-medium business owner. The constant juggling of your revenue-generating tasks side by side with marketing, administration, and bookkeeping can be overwhelming and take a toll on your mental health. That’s why we’re here to make your life easier. 

For further information, contact us today

Phone Number- 281-808-0594