There are so many reasons why accounting records are beneficial to a business. They help you keep tabs on the business, they help you be more efficient, they help you develop strategy and they help you track progress.
But the most important reason to have accounting records for a business is the fact that no matter where you are in the world, it is a legal requirement to have them.
So regardless of the size of your business, or the company type or the country you reside in, please be sure that your business keeps the following records:
- A register of your assets, particularly your non-current or fixed assets (items that hold their value for a long period of time).
- A register of your company loans and liabilities. Loans in and out of the business must be recorded. Amounts and terms are of particular importance but you also need to be sure that you have all your supporting documents.
- A detailed record of the company’s income and expenditure.
- A detailed record of the company’s inventory and stock movements.
You will obviously need all of the above in order to accurately declare your income on your tax returns and you will need copies of ALL of your supporting documents in case your taxman queries anything you declare.
No matter how small your business is, you can get yourself into some very hot legal water if you do not keep correct records – so make sure you have accounting records and that they are updated on a regular basis!
And for the sake of your business, go beyond your legal requirements and learn to USE your accounting records in order to grow your company!
