Running a small business is much different than being responsible for a larger company. Piles and piles of paperwork can quickly add up, which means your important papers and incoming mail could be getting lost in the shuffle. How do you avoid this and any potential problems with the IRS or your state business authority? Every business owner needs some advice from time to time, so take ours!
The Importance of Business Paperwork
Your business paperwork, even when it’s several years out of date, is still important. Hanging on to old records sounds silly, but it’s a vital part of your business for tax reasons. The IRS recommends that you keep receipts for four years, but be warned that you might need to save them for as long as six years instead. Disorganized records can make any auditing process even more nerve-wracking than such an experience already is.
Collect Your Receipts Somewhere You Can Find Them
With that in mind, put your receipts together where you can find them quickly and efficiently. There’s a reason why digital bookkeeping has supplanted file folders and cabinets as the primary medium for organizing necessary documents for both home and business uses. Suppose your business hinges on customer service rather than consumer products. In that case, it’s not likely that you’ll have many paper receipts. This matter gets even trickier when you consider the advent of digital payment platforms such as PayPal, Venmo, and CashApp. Bottom line? Create a digital file folder according to each month. Bookkeeping software will help keep you on track with this responsibility.
Dealing with Bank Statement-Related Records
Along with the IRS and state business boards, you’re going to need to interface with the banks. That’s why bank statements are another essential piece of paperwork to save. Assemble all of your statements and then print them out one by one. Place them into neatly labeled monthly envelopes. Alternatively, you can use PDFs that you upload to cloud services such as Dropbox, Google Drive, or iCloud.
Holding Onto Your Relevant Invoices
Retaining invoice paperwork sounds like strange advice, but it does matter. QuickBooks can help you ensure that all of your sales taxes are properly accounted for. Besides, it’s an easy way to track your tax documents while you work on setting up a backup location for them.
Trust the Professionals at the Harding Group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients.
Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning? We have the necessary expertise and years of proven results to help.
We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, YouTube, and LinkedIn.