Maintaining accurate and organized financial records is crucial for the success and sustainability of your business. The key financial records you should keep include:

Income Statement (Profit and Loss Statement): Tracks your revenues, costs, and expenses over a specific period, showcasing whether your business is profitable.

Balance Sheet: Provides a snapshot of your business’s financial health by detailing assets, liabilities, and equity at a given point in time.

Cash Flow Statement: Shows the “inflows” and “outflows” of cash within your business, helping you monitor liquidity and manage cash flow effectively.

General Ledger: This is the master record that contains all your financial transactions. The general ledger should track all of your business accounts, including assets, liabilities, equity, revenues, and expenses. It acts as the basis for creating other financial reports.

Accounts Receivable and Payable Records: Tracks the money owed to you by customers (receivables) and the money you owe to suppliers (payables).

‍Expense Records: Detailed documentation of all business expenses, including receipts, invoices, and bills.

Payroll Records: Includes information on employee wages, salaries, benefits, and tax withholdings, which is essential for tax filings and compliance.

Tax Filings and Records: Keep copies of all tax returns, payment receipts, and related documents to ensure compliance and simplify audits.

Loan and Debt Records: Documents related to any loans, including agreements, repayment schedules, and interest payments.

Keeping these records up-to-date and organized will not only help you make informed financial decisions but also ensure you’re prepared for tax season.