Why Should I Keep Good Records?

Written by:  Suzanne Cody CPA, CGA, Senior Partner

We all know that anyone in business needs to keep records. Keeping good records is not always easy but is really quite important to your business.

You need to keep good records to monitor the progress of your business. Records can show whether your business is improving, which items are selling, and what changes you need to consider making. Good records increase the likelihood that your business will be successful.

Having accurate financial information available is necessary for controlling your business. The information on your financial statements will help you in dealing with your financial institutions.

You receive money from many different sources. Records identify the sources of your income which is important because it separates your taxable from your non-taxable income.

Keeping track of deductible expenses as they occur is important. You may forget expenses that will reduce the amount of tax you pay by the time you file your taxes.

Keeping track of investments and real property is important for calculating capital gains for tax purposes.

You need good records to prepare your tax returns. These records are used to support the income, expenses, and credits reported to the government. For further details on your legal responsibilities on record keeping click here.

Cody & James Chartered Professional Accountants