Owning a business comes with a lot of paperwork. Nevertheless, it’s important to decide which documents go into the files and what to throw away. Even before you start keeping records, understand the importance of the exercise. First, the revenue authorities might come knocking at your door without notice and demand to see your tax records and any other supporting documents. Secondly, you need to know how your business is fairing on, and lastly, in case of issues, whether with clients, the authorities, or supplies, you can always revert to the documents for solutions. Here is a list of business records to keep.
Accounting documents are critical for a precise analysis of the business health and for filing tax returns. This includes all income sources, expenses, and assets. Records also help in expenditure analysis. They are instrumental in making critical decisions such as cutting down on costs or comparing the performance of the company. It is also faster when you want to check the purchase price of different items or find out whether you have the required capital to cater to the expenditure. For instance, you can use text recognition using C# for OCR barcode technology for easier tracking of different financial records.
It’s advisable to have insurance to cover different aspects of your business. For instance, you may want to cover your business against damage from a fire or natural occurrences. Other insurance policies to consider include cover against losses, theft, auto insurance, and renter’s insurance.
You may also consider taking appropriate insurance covers for your employees, depending on the type of business you are involved in. Insurance records are vital when making claims or when the concerned authorities want to check whether you are up to date with insurance payments. Additionally, the documents may be required in case of legal disputes. They also contain vital information you can always refer to, including your policy number.
Licenses and Permits
Every business requires permits and licenses to operate in a given jurisdiction. The local authorities may want to check whether you adhere to the stipulated regulations by reviewing the documents periodically. In addition to this, you should be aware of when you need to renew the licenses and permits. Moreover, you may need extra permits, depending on the type of work you handle. For instance, you may require a business signs’ permit for areas where the sign size is restricted.
There are two types of invoices, both of which need to be recorded. These are the outgoing invoices and incoming ones. Outgoing invoices are sent out to request payments for services rendered or products sold by the business. They are crucial in understanding the income flow of the company. Incoming invoices help in checking the business’s expenditure.
When the two are analyzed, it’s easier to see the profitability. Note that the tax authorities pay attention to these documents to ensure your tax records are correct. Mandatory inclusions in the invoices include the product’s particulars, dates, and worth. Because of the many business records that need filing, a business record management plan should be implemented for organizing and tracking the documents.
With a record management plan, it’s easier to retrieve documents when needed. It also prevents loss of documents because you can quickly tell when a particular report is not in place. Barcode scanners are ideal for business document tracking and organization.
It’s essential to have records of all the business’s bank accounts and balances. Also, transaction records, monthly, and yearly bank statements should be filed appropriately. You can compare the bank records with the accounting records to ensure they correspond. Additionally, it is easier to analyze the business’s financial wellbeing when you have the bank and accounting documents. For easier management of the records, using barcode scanners and QR codes to track your business documents is recommended.
As you manage the business records, it’s important to know the duration you should hold on to them. This also makes sure you only have what the company needs, which makes the business records search easier. Also, for the safety of the documents have separate physical and digital record-keeping systems.
Guest Post: About the Author
Emily Lamp is a professional writer, working closely with many aspiring thinkers and entrepreneurs from various companies. She is also interested in technology, business growth and self-improvement. Say hello to Emily on Twitter @EmilyLamp2.