Having records that are reliable and complete will help you run a successful business.
Keeping proper records will help you
- Identify the sources of your income
- Keep track of the expenses you can deduct and the tax credits you can claim
- Determine what taxes are due
- Have the financial statements you need to make good business decisions
- Assist you in getting loans from banks and other lenders
- Meet Government deadlines and avoid any late filing fees or penalties
How to keep your records
Your paperwork needs to be SEPARATED, ORGANIZED and RECORDED.
When reconciling your accounts, you can use credit card or bank statements. You will also need the receipts, invoices, deposits and bills for the business as a back-up.
Keep your receipts so that you can identify and validate any expenses. Without these receipts, some expenses could be disqualified in an audit.
Don’t forget to keep your receipts for tracking auto mileage, employee expenses, operating expense and all start up costs.
You will need itemized details on your invoices with the names, address of customer or vendors, as a hardcopy and/or in PDF format.
Store your records electronically
You may keep an electronic copy of sales invoices, purchase receipts, contracts, guarantees, bank deposit slips, canceled cheques, cash register slips, credit card receipts, purchase orders, work orders, delivery slips, emails and general correspondence.
You can store your paperwork in PDF format that are easily readable, and they can be printed if requested.
If you scan images from a paper document, records, or books they need to be in an acceptable electronic format.
If you own a corporation?
You will need to keep records of:
- Internet business activities
- Minutes of meetings of the directors and shareholders
- Ownership of the shares of the capital stock
- Transfers of shares
- General ledger or other books of final entry – in paper or electronic format
- Summaries of the year-to-year transactions
- Any special contracts or agreements necessary to understand the entries in the books