What Itemization Should Be Kept in Bookkeeping?
Bookkeeping and itemization is necessary for any business to keep a record of income derived from the business or expenses incurred. Among the items that should be included in your bookkeeping are income from your business, purchases, expenses incurred, inventory, debts and employees. Itemizing also helps you keep track of your business trends. Keeping records for itemization in your daily bookkeeping helps you when filing taxes for your business during tax time.
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Gross Receipts
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Record the income, also known as revenue, you derived from your business. Keep a total for tax purposes by keeping receipts of cash register tapes, bank deposit slips, any invoices, credit card slips and any 1099-MISC forms. A 1099-MISC is a tax record of any payment made to a commission-based employee or a self-employed person.
Purchases
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Keep a record of the purchases you make for your business. Purchases are any items you buy for the purpose of reselling to your customers, such as a final product. Supporting documents you should keep for purchases include canceled checks, credit card slips, cash register tape receipts and any invoices. A record of any cash expenditures should also be kept by writing any reimbursable checks or petty cash receipts. Keeping a record of cash expenditures using receipts are an acceptable form of documentation in regard to the IRS.
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Expenses
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Write down any expenses you incur from your business to keep as a record. An expense is any cost your business incurs, other than purchases for your business to effectively run the business, such as computers or cash registers. Documentation for expenses may be in the form of canceled checks, cash register tapes, account statements, credit card sales slips, invoices or petty cash receipts.
Inventory
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Keep a record of the inventory within your business. An inventory helps you track business trends and avoid theft or the misplacement of merchandise. Inventory includes the goods for your business, when the purchase was made for the goods, the stock number for your goods, the dates the goods were sold and any other relevant information.
Accounts Receivable and Payable
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Track any debt that customers owe you and any debt your business owes to others. Document the debts by keeping invoice dates, account numbers, amounts paid and owed, as well as any balances and client information.
Employees
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Record the payroll for each employee within your company with either a W-2 or a 1099-MISC form. A record of the I-9 form should also be kept on file. An I-9 form verifies the employee's eligibility to work. Keep a record of any withholdings for each employee, unemployment, workers' compensation and employer matching. These records are required to be kept for a minimum of four years.
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References
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