How Long Must a Business Keep Sales Records in Alabama?
Sales records are the information a business compiles on its customers. Sales records include information about customer purchases, customer addresses and the payment of customer debt. Alabama business must consider several facets of application for sales records to determine the necessity of keeping them filed.
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Properly Filed Taxes
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According to the Internal Revenue Service (IRS), sales records should be kept for as long as they have information that is relevant to tax claims. The minimum determined by the IRS is three years if you owed additional tax or claimed a return or credit.
Improperly Filed Taxes
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When taxes are improperly filed, the IRS has a different protocol. Failure to report more than 25 percent of your gross annual income means that year's records must be kept for six years. Records must be kept for seven years if the business is claiming a loss of worthless securities. When a business files fraudulently or fails to file, the IRS has no statute of limitations on examining business records.
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Benefits to the Business
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Sales records project future sales based on past customer needs. Keeping detailed sales records to project future demand on supplies helps businesses lower cost by not over-purchasing materials.
Sales records are important for businesses in Alabama to keep because banks and insurance companies take these records into account when determining a loan or insurance rates.
Sales records track expenses and sources of income to Alabama businesses. The business owner is able to ensure prompt payment by this form of tracking.
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References
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