How to Better Organize Your Record-Keeping

The record-keeping part of the job is never fun, but it is a necessity if you need a loan or are being audited, says Barbara Weltman, attorney and author on the SCORE blog yesterday. Always easy to ignore, the importance of tracking your revenue is the whole of your business, she says. Weltman lists ways entrepreneurs can keep better books and records:

Keep your records in a consistent way. Nowadays, most small businesses use software or online accounting programs for recording income and expenses.

Keep all receipts. That includes invoices, canceled checks and other paperwork to substantiate any tax deductions you claim on your tax return. Also, make sure however you store these receipts (as paper or scanned into your computer) and that all that data is easy to retrieve.

Keep your personal and business bank accounts separate. Mixing up your two kinds of finances is a sure way to miss deduction opportunities come tax time. Same for credit cards – have a personal card and a company card.

Keep to a routine. Record your income or expenses in the same way, at the same time of day or week. The routine will force good record-keeping habits.

Read the entire article at SCORE.