Without detailed records of Expenses, you’ll be hard pressed to be able to see what percentage of spend is going to which category of spend. These numbers will be able to provide a comprehensive view on business expenses and where that translates into direct revenue or are considered necessary associated costs.
Do businesses have to keep records?
If you own a small business, you need to keep business records, whether in digital or hard copies. The IRS recommends saving financial records for up to seven years, although some documents should be saved longer than others. These are necessary for annual tax filings and potential audits.
What records should a business keep?
Here are the main types of records you should hang on to:
- Receipts.
- Cash register tapes.
- Deposit information (cash and credit sales)
- Invoices.
- Canceled checks or other proof of payment/electronic funds transferred.
- Credit card receipts.
- Bank statements.
- Petty cash slips for small cash payments.
Why is it important to keep good records in your business?
By keeping good records, you allow yourself to quickly determine how your business is doing at any particular moment. After keeping good records for a while you will be able to notice trends in your business and work to take advantage of them or minimize their impact.
Why is it important to keep track of your business?
Part of running a successful business is being able to make decisions, being able to cast a vision and reach goals. How do you know where you are going if you can’t track what is going on with your business? By keeping good records, you allow yourself to quickly determine how your business is doing at any particular moment.
Why is it important to keep records in Kenya?
Record keeping is not only important when preparing your financial statements and filing your tax returns, but it is also required by the revenue authority that you keep your records. In Kenya, a lack of proper record keeping attracts penalties to a business or individual.
Why do startups need to keep financial records?
Most startups do not have proper financial records and though they improve as they grow, the information in the first years can be crucial as it documents the basis of your company.
