Keeping good records for your business is important and essential. Unorganized or missing records can cost you deductions and create complications if you are ever audited.
According to the IRS, keeping good records will help you:
- Support information reported on tax returns
- Keep track of any deductible expenses
- Identify sources of income
- Prepare your financial statements
Good record keeping for new and current businesses will establish best practices and help monitor progress. In addition to tracking expenses and inventory, records can shed light on changes needed to improve your business and will allow your tax professional to help with tax planning.