Business Record Keeping Explained

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Running a business requires a fair amount of dedication and discipline. While many business owners tend to get caught up in the day-to-day running of things, they often neglect to take care of business record keeping. 

In reality, keeping good records makes accounting and auditing easier. Instead of having to sift through mounds of paperwork, by implementing systems that enable efficient business record keeping, organisational management will be able to save valuable time and resources. 

It also provides immediate information about the financial status of an organisation. By clearly indicating the amount of cash flow coming in and going out, a company is better able to strategise ways to improve business functioning. 

In case legal action is taken against an organisation, having well-maintained business record keeping will be beneficial. If there are any documents required, finding them may be easier and providing proof may be simpler and less time-consuming. 

Records must explain all transactions and should be in writing. They must be kept for a minimum of at least five years. 

As a business owner, record keeping helps you meet financial commitments. You are more likely to keep track of payments due to creditors when you have regular checks of business records. They also help to identify sources of income, while also keeping track of deductible expenses. 

You need to be able to access and update them on a regular basis. 

Business records include: 

  • Governing documents 
  • Financial reports 
  • Tax records 
  • Employee records 
  • Banking records 
  • Registration documents 
  • Contracts and Agreements 

The records should be stored safely and in a way that will avoid any liability on the company’s end in terms of failure to protect sensitive data. Employees should feel confident that their personal data will be stored safely.

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