Why Record Keeping Is Important for Startups

A good startup CEO knows why record keeping is important for startups. The startup needs to control finances and to be able to pay taxes. You need to be able write weekly and monthly reports that build to an annual report. These help you to build fund-raising packages; etc.

Record Keeping Is Important for Startups

  • Record business expenses
    These expenses build to invoices in some cases and to tax deductions in others
  • Organize your records
    Otherwise you will be paying a tax preparer to do it for you. Please recall that if they miss a few expenses they will not care as much as you do
  • Time lost spent looking for records could have been spent doing something that would increase your revenue
  • Timely record keeping and record organization allows the business owner to review a complete set of books each month. Then you know you are in control of your destiny
  • Small businesses do not need expensive accounting software. A written journal will do. But purchasing an upgraded version of QuickBooks by Intuit or a similar software package every few years will help you keep and organize your books…..and reduce tax preparation expenses
  • In a few hours your accountant and QuickBooks will guide you through setting up systems to record sales, expenses, inventories and shipments. This will allow you to generate monthly reports for accounting purposes, inventories, income statements, balance sheets, cash flow statements, and etc.
  • Bank records
    QuickBooks will help you reconcile your business checking accounts. Keep loan information and everything else from your bank(s).
  • Contracts
    Always keep the original copy of all signed contracts. Also real estate leases, equipment leases, purchase agreements, sales agreements, joint venture agreements and etc.
  • Corporate records
    You should incorporate as an S, C, LLC, Partnership, or etc. As recommended by your lawyer and keep the articles of incorporation, bylaws, shareholder minutes, board minutes, state and Federal filings and amendments to these documents. Also keep all Corporate Stock transaction records and filings
  • Business Correspondence
    Keep all business correspondence for seven years or as recommended by your accountant/lawyer. Also all non-disclosure agreements.
  • Employee records
    Keep all employee records for seven years or as recommended by your accountant/lawyer. This includes handbooks and policies
  • Forms
    Keep copies of all filled in copies of your forms as a part of your business records.
  • Intellectual property records
    Keep all documents relating to patents trademarks and copyright.
  • Marketing records and collateral
  • Permits and licenses; federal, state and local.
  • Tax records

Conclusion

Record and organize all your business records and keep them for seven years or as advised by your lawyer/accountant.

References

 

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