Everyone has to do it; yes, even you. Keeping your accounting books up to date is vital to ensure your success and legitimacy in the world of business both now and for your future.
Accounting, which is also commonly known as bookkeeping, is a necessary business practice that establishes your credibility while ensuring the maintenance of your budget by closely monitoring expenditures and profits. Generally, if you have any shareholders, partners or investors, they can legally request to view the business’s accounting books at any time with little notice. Providing this information quickly and transparently is the greatest acknowledgement that you are mindful of your finances in terms of your profits, loss, expenditures and investments. It is widely frowned upon to have a relaxed attitude when it comes to accounting and can often be perceived as apathy and ignorance. Not only do you need to keep your books up to date for your partners but, in some countries, you are legally required to keep copies of all of your business records for nominated periods of time. In Australia, for example, businesses are required to keep all hard copy records for up to five years. In the United States, hard copy business records must be kept for a minimum of seven years. These records include copies of all of your sales and purchasing invoices. It is always a good idea to research the requirements of book and record keeping in your country to ensure that you are compliant with their standards or regulations.
Be sure to maintain your collection of receipts and invoices in a timely fashion so that your records are always up to date. Having a system in place that effectively suits your circumstance can make bookkeeping less of a hassle and more of a natural step in your daily operations. Establishing a routine to help you enter your data regularly is vital to ensure that you will always be on top of your books and will not have to scramble at the last minute.
Do you adequately and efficiently maintain your books? If your stakeholders were to ask to see your records today, would you be ready? When your business begins to grow, you may find that you need to employ a professional service or bookkeeping assistant to better manage your books and tax returns. These types of services are available in a variety of opportunities. For small business, this service can mean employing one person for a couple of hours each week or, for larger businesses, may take the form of a full-time employee or several full-time employees to comprehensively manage your business records.
Above all else, ensure that you know the tax laws that are specific to your country of business. Failure to keep your books up to date can result in fines by the tax department which can be costly. Starting out your business or new invention with tax problems is not the best means to establish a strong reputation in the business world.