Keeping Accurate Financial Records in 2022
New Year’s Resolutions can be excellent ways to set goals and change your behavior and business practices. It can take some time to get into a new method, but after a few weeks, you will begin to see positive results.
If you’re a business owner or operator, you might want to consider a New Year’s Resolution to keep accurate financial records for the new year. Too many times we can all get caught up in the fast pace of business, and make a mental note to catch up when “everything settles down.”
Unfortunately, this rarely happens.
One method for keeping a resolution is to write down what you want to achieve. This simple action turns an idea into a tangible goal.
Financial records will not only help when it’s time to prepare your taxes, they can serve as reliable milestones that help with adjusting your business plans and sales strategies. With COVID continuing to impact every facet of society, a quick pivot may be necessary – having reference materials can make this action easier.
Simply put, this is the income you receive from your business – not the profit. The recording of gross receipts and/or deposits should be completed by the end of every business day, especially if you run a retail operation or in any industry with a high frequency of transactions or large dollar amounts. Here are a few items that should be closely tracked.
- Cash register tapes
- Deposit information, whether it’s cash or credit
- Invoices that have been paid
Materials you purchase to help your business can be tax deductible, and reviewing them at the end of every month or quarter can indicate if they’re becoming more expensive, or no longer need to be purchased. For instance, if you have a cleaning service that comes in every week, you may realize that twice a month is a better, more affordable option.
Concentrate on saving documents that include:
- Canceled checks
- Credit card purchases
An expense is defined as a cost you incur to run your business. Keep a record of who you paid, the amount paid, proof of payment, and what you purchased, whether it’s a product or service. You’ll want to save items such as:
- Cash register tapes
- Account statements
- Credit card receipts
Any property that you purchase to keep your business solvent should be recorded. Whether you own a factory and have to buy heavy machinery or you own a law firm that needs meeting tables and chairs – these are considered assets.
You need to keep records of employment for 4 years, as dictated by the Internal Revenue Services. One of the most important parts of many businesses is payroll, and if you keep your own records instead of using a payroll service, there is a detailed list of what has to be recorded. The IRS website is an excellent resource for employment tax recordkeeping.
Stick To Your Resolutions – Taurus Can Help!
Staying true to your commitment for record keeping doesn’t have to be difficult when you’re working with an accomplished CPA firm staffed by experts.
Taurus CPAs has the expertise, knowledge and qualified staff to help. If you have questions about our services, or need to speak with one of our experts, contact us today.