The Importance of Keeping Records For Your Business

Running a small business can be stressful and time consuming. It can also be difficult to keep organized, especially records you will need for filing taxes.

The advantages of keeping great records of your small business are as follows:

• Project your tax liability
• Prepare your tax returns
• Keep track of deductible expenses
• Prepare your financial statements
• Monitor the progress of your business

Project Tax payments
Keeping records will assist you in estimating the payments you may end up paying come tax season. This can be used to pay tax on income, such as the ones listed on your tax return.

Preparing Tax Returns
Keeping tabs on the reports that state business income, expenses, and credits will assist you on your tax returns. These will also help create your financial statement.

Keeping Track of Deductible Expenses
Keep ahold of all receipts you received after making expenses that can be considered deductibles. 

Prepare Financial Statements 
You want to make sure you are preparing accurate financial statements. Be sure you are including income that was gained and lost on balance sheets. 

Monitor your Business’ Progress
In order to show how well your business is doing over time, you will need to have kept great records of the progress your business has made so far. Be sure to include the changes that are being made.

Pathways Consulting wants to help make your small business shine! If you have questions about record keeping, taxes, or anything else, please contact us!