Skip to Content
facebook facebook twitter twitter facebook facebook twitter twitter

Recordkeeping

For small business owners everywhere, record keeping is a necessary and sometimes tricky part of making sure a business runs smoothly. Keeping clear records of income, expenses, employees, tax documents and accounts isn’t just good business. It can bring you peace of mind, help you monitor progress toward goals and save you time and money.

Recordkeeping

Basic records include:

Keeping these records will help you:

  • Know how much money to invest to create your product or service
  • Set pricing
  • Compare budgeted amounts to actual costs
  • Track spending
  • Make wise decisions about purchases
  • Prepare for tax time
  • Access customer and employee information easily
  • Protect your business in the event of an audit or employee issue
  • Calculate expected profit

To start the recordkeeping process, determine a system for tracking transactions and other details. It may be online, on paper, or a mixture of the two. Here are some of the most important records to include:

Sales log: This log should include how much you sell per day, per week and per month, including the date, type of product or service and the amount of each sale.

Accounts payable log: An accounts payable log lists the money that a company owes other people or businesses. Include how much is owed, to whom, when payment is due and the date you paid it. Keeping a solid accounts payable log will prevent you from being charged for the same product or service more than once. It’s also useful to track discounts offered for early payments to help yourself remember to take advantage of them.

Accounts receivable log: An accounts receivable log lists the money that other people or businesses owe to a company for goods or services the company delivered. This log includes a list of customers who owe you money, how much they owe and when the payment is due. You can also include a list of customers who should not be provided with credit due to past failure to pay. For each record, include the date, customer name, amount, date collected and status.

Business expenses log: Here you’ll record the total amount of business expenses you have, such as rent, electricity, salaries and supplies. The log should include date, a description of each expense and the amount.

Purchase order: A document which shows the official confirmation of an order by a buyer committing to pay the seller for the sale of a specific product or service in the future.

Contracts: Whether you sign a supply agreement with a vendor, rent a new piece of equipment or take out a business insurance policy, you should keep a copy of the contract in your records. Keeping a copy of any contracts can also help you prevent disagreements in the future.

Customer list: Depending on your business, it can be smart to keep track of your customers’ information so you can advertise deals or new products. Include customer name, products bought, phone number, email and mailing or shipping address. You should have a security plan in place to keep this sensitive information safe.

To stay compliant and avoid legal trouble, it may be important to keep copies of some records even after they’re not useful for day-to-day operations. For example, you may want to keep copies of all your contracts for up to seven years, but you should probably keep auditor reports, annual statements and retirement plan records indefinitely.

Download recordkeeping templates here.

Share

Disclaimer: No Legal Advice Intended
This site provides general information related to creating and running a business. The content of this site is for informational purposes only and not for the purpose of providing legal or tax advice or opinions. The contents of this site, and the viewing of the information on this site, should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. No action should be taken in reliance on the information contained on this site, and Visa Inc. disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this site to the fullest extent permitted by law. You should contact an attorney to obtain advice with respect to any particular legal or tax issue or problem, including those relating to your current or potential business.

The contents of this site have been developed for a U.S. audience.