When it comes to owning your own business and working for yourself, there are a lot of things to remember. All these aspects to remember are things that could help or hinder your business. One very important job to remember is that of record keeping. It requires a fair amount of patience and organisation but, if done properly, can help you in many ways.
Keeping good records can help you keep track of the progress your business is making, prepare your financial statements, prepare your tax returns and keep track of your expenses. It means staying on top of your business and being in the know of all that is coming into your business and what’s going out.
The type of records you need to keep depends on your business but the general rule of thumb is to clearly keep track of your income and expenses. The way to do this best can be alphabetically, numerically or by date and month. Some business people work best with everything arranged by month, others by name. Whichever way works for you, it’s best to be, and try to stay, organised.
If your records are organised and kept together, it’s easy to keep track of what’s happening and what you need for various times, e.g. tax season. If something also goes wrong within your business, good record keeping can help rectify the problem and potentially save you money. If you are not a very organised person and are someone who struggles to keep your records in order, we suggest hiring someone to help you keep your records in order.
It is suggested that you keep all records for a minimum of 7 years. By not keeping your records, or if you find yourself not being able to produce a record of something, SARS could penalise you up to 200%. Because SARS could ask for proof of something regarding your business at any time, we advise that you keep your records up to date and organised for the recommended 7 years. Additionally, if you cannot support any deductions you’ve made, SARS will question the validity of all your claims – an unnecessary situation one might find themselves in if only they had stayed on top of their records.
Because record keeping is so important, it is vital that it is done correctly. It can be as easy as keeping files and folders for each expense, but if you’re not a very organised person, PATC is on hand to help keep you on top of your business records. For information on how to keep good records, or how to be more organised with your records, contact us today and we’ll help your stay on top of your record keeping.
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