Small business owners should keep good records. This applies to all businesses, whether they have a couple dozen employees or just a few. Whether they install software or make soft-serve. Whether they cut hair or cut lawns. Keeping good records is an important part of running a successful business.<\/p>\n
Here are some questions and answers to help business owners understand the ins and outs of good recordkeeping.<\/p>\n
Why should business owners keep records?<\/a> What kinds of records should owners keep?<\/a> How long should businesses keep records?<\/a> How should businesses record transactions?<\/a>
\nGood records will help them:<\/p>\n\n
\nSmall business owners may choose any recordkeeping system that fits their business. They should choose one that clearly shows income and expenses. Except in a few cases, the law does not require special kinds of records. .<\/p>\n
\nHow long a document should be kept depends on several factors. These factors include the action, expense and event recorded in the document. The IRS generally suggests taxpayers keep records for three years.<\/p>\n
\nA good recordkeeping system includes a summary of all business transactions. These are usually kept in books called journals and ledgers, which business owners can buy at an office supply store. All requirements that apply to hard copy books and records also apply to electronic business records.<\/p>\n