Good evening group.
Today we look into record keeping among other things.
First and foremost, you must have a secure place to keep your records. A good filing cabinet is a great start. It should be a minimum of three drawers and four is better. Why not build one? They’re an easy build. I once did one with nothing but a Skill saw and a router. MDF covered in plastic wood grained laminate. Still have it some 29 years later and it still serves its purpose..
Organize your files! Keep your gas receipts separate from your wood receipts. Use file folders for each type and have one for each month. At the end of the month, put a new set in front of the old ones and total the old ones up for the past month, then enter the totals in your books. This way you don’t get caught in a mad scramble at tax time. It also helps with knowing where you are financially at any time. Remember to put your papers away every day! Don’t let the sun set with papers in your pocket!
Once you have done your books for the year, retire the file folders to a storage box labeled with the year and what you have in the box, such as “1999, receipts” or “1999, sales slips” etc. This way you can quickly lay your hands on any piece of important paper in moments. This can settle disputes with suppliers, customers, the car dealership’s repair shop or even the tax man.
Retain these files at least five years, more if you want, but never any less.
If a receipt isn’t clear as to what it is for, write that information on the receipt. Don’t trust your memory to be enough to keep track. (I know I’ve mentioned this before but it fits here too)
These files are like a history of your business, and as such are valuable information and should be treated as such.
Another important point, replacing these records in the case of their loss through fire, flood or other disaster would be well nigh impossible, so make backup copies. Use a scanner and transfer them to a computer CD-ROM disk. Store these disks AWAY from the business. Your home if there is no other option, although the safest place is a safety deposit box. They are quite inexpensive to rent, and the rent is tax deductible. A lot cheaper solution that having your accountant rebuild the records at his hourly rate.
Well, this should give you some basics of getting into the world of business. This is nowhere near a complete course on the subject, but remember, I have had to talk in generalities in light of this being a multi-national forum and what works in Rome doesn’t necessarily work in Carthage.
I may add another chapter or two to this blog if I come up with something general enough to be of interest to all.
Have a great today and a better tomorrow.
-- The nicer the nice, the higher the price!