The duty of recordkeeping is generally put off until the last minute, when it is absolutely necessary. It’s time to submit your tax return, or you’re going to the bank to receive a company loan, and the banker wants to examine your financial records. If you have to go through all of your receipts and expenses for the whole year, this can be a very scary and time-consuming chore! It’s no surprise that we despise keeping records. That’s no way to have a good time!So, what’s this? You don’t need to be in business if you aren’t keeping good, timely, and up-to-date records monthly. That’s correct. That’s what I said. Here are the top five reasons why I am convinced of this assertion.

1. Tax deductions lost money: lost I’m willing to guess that if you dump your receipts in a shoebox each month and don’t keep an organized record of your income and expenses, you’re missing out on some significant tax deductions. A savvy entrepreneur maintains track of her income (cash in) and expenses (cash out) on a monthly, if not weekly, basis. This does not necessitate the use of a complex accounting program. You don’t even need a computer to get started! Simply keep a monthly diary and record all of your receipts and bills, and you’re done.

2. Excessive CPA/Tax Preparer Fees: Mean Money Lost I can tell you from personal experience that bringing in a shoebox full of receipts for the year and expecting your tax preparer to properly record and deduct your company expenses on your tax return is a mistake. For many specialists, tax season is the busiest time of the year. Expect to pay if you want them to conduct your bookkeeping and recordkeeping as well. They don’t have the time or the motivation to double-check every receipt. It is your obligation as a business owner to ensure that they are provided the correct totals, and you can trace this back to your tax return.3. Spending too much time looking for receipts You may use the time you spend hunting for a former receipt for a certain purchase for whatever reason to advertise your business or produce your goods. These are vital revenue-generating activities that you are foregoing as a result of your poor recordkeeping.

4. There are no financial statements Every business owner should at the very least check their profit and loss statement (income statement) ON A MONTHLY BASIS. This crucial piece of paper indicates whether you are profiting or losing money. How can you manage a business and earn a profit if you aren’t constantly reviewing your sales and expenses? This information will be at your fingertips if you use a competent recordkeeping system.

5. There’s no need for costly accounting software. You most likely do not require software to prepare your books if you are just starting your firm or own a small business. All you need is a simple monthly journal of your earnings and expenses. You’ll be able to see how your business did for that month at a glance.
You must understand the value of a strong recordkeeping system as a business owner. Before transferring the activity to someone else, the business owner should undertake it for at least three to six months. You’ll be able to run your firm more efficiently, predict probable business cycles, and understand where your money is going. If you keep a simple recording system in place, your firm will be lot more successful.