How to Maintain Business Records
Meticulous and organized business records not only give you a clear financial picture of your business, but also allow you to track and stay up-to-date with other important business matters. For example, businesses and corporations present updated and organized financial documents to the appropriate authorities when audited or inspected. Maintaining accurate business records also allow you to know--at any time--the state of your clients' or customers' accounts.
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Instructions
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Compile any documents related to cash sales and accounts receivable. Keep sales slips and receipts, cash register tapes, credit card charge slips and sales invoices. Place these hard-copy documents and items in a safe and secure lock box or storage unit.
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Keep records of all purchases made for business operations and supplies. Store hard-copy documents for expenses, such as checkbook stubs and credit receipts, in a safe place. Maintaining these expense records allows you to refer to them if you want to revoke or dispute any transactions.
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Update your general journal and ledger documents on a daily basis. Record all debits and credits to document how money was spent and to update individual accounts such as accounts receivable, accounts payable, and sales and expense accounts. Update both electronic records and hard-copy journal and ledger documents.
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Organize your banking records in a separate place. Save and/or print hard copies of bank statements, cancelled checks, deposit slips and loan documents. Save all other general correspondence from your bank or financial institution. Store all documents neatly in a filing cabinet or other storage place, organized by date or type of bank correspondence (e.g. monthly statements, loan documents).
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Follow your accounting method guidelines to create business financial documents. Generate balance sheets, income or profit-and-loss statements, and cash flow statements on a monthly, quarterly and yearly basis. Compare documents from previous years to determine the general financial path of your business. Store either electronic or hard copies of these financial documents, or both, organized by statement date.
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Keep all documents relating to business deals and contracts. Create a separate file for each person or entity with which you enter into an agreement. Update these documents as needed, such as when new clauses are added or contracts renewed.
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Create a reminder system for throwing out old documents and keeping existing ones. Set reminder dates in electronic calendars to get rid of documents after a certain time. For example, employment tax records--according to the Internal Revenue Service--must be kept for at least four years after the tax has been paid or was due. Bankrate.com recommends keeping employment application records for one year, bank reconciliations for three years and employee records for seven years after employee termination.
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