In the operation of your business, you will come across many types of records related to your income and expense transactions. While it is impossible to list all the records for every possible transaction, following are some examples of records to maintain:
Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents for gross receipts include the following:
Cash register tapes
Deposit information (cash and credit sales)
Receipt books
Invoices
Forms 1099-MISC
Purchases are the items you buy and resell to customers. If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should show the amount paid and that the amount was for purchases. Documents for purchases include the following:
Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transferred
Cash register tape receipts
Credit card receipts and statements
Invoices
Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should show the amount paid and a description that shows the amount was for a business expense. Documents for expenses include the following:
Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transferred
Cash register tapes
Account statements
Credit card receipts and statements
Invoices
Petty cash slips for small cash payments
Travel, Transportation, Entertainment and Gift Expenses: If you deduct travel, entertainment, gift or transportation expenses, you must be able to prove (substantiate) certain elements of expenses.
Assets are the property, such as machinery and furniture, that you own and use in your business. You must keep records to verify certain information about your business assets. You need records to compute the annual depreciation and the gain or loss when you sell the assets.
Employment Taxes: There are specific employment tax records you must keep. Keep all records of employment for at least four years.
If you need advice or services on any aspect of bookkeeping, accounting and tax, our specialists are ready to help. Get in touch with us for free quote.
