As a small business owner, you must maintain copies of your financial reports. Even though we are living in a digital world, technology can still fail us. You need to have a backup of all your financial data so you can address issues that may come up, like a tax audit. Yes, tax audits actually happen! And nothing looks as shady as not being able to provide financial documents.
By not having bank statements, receipts, business reports, and critical documents backed up, your business could be compromised at the time of audits either by a governing body or tax preparer.
How to Ensure Your Financial Records are Safe
Ensure Your Bookkeeping System Includes Historical Data
Your bookkeeping system needs to include your historical data so you can always reference it. This historical data will help you understand how your business is growing and help you project your upcoming expenses based on historical trends.
Export Your Monthly Reports
On the first of the month, we recommend exporting your financial records from your bookkeeping system. This will ensure that if you ever decide to change your bookkeeping system, you have an extra copy of your finances.
Make Copies and Store Your Finances on a Separate Device
We always recommend duplicating and storing your financial records on an external flash drive. This will ensure you have an extra copy in case your computer crashes.
As a small business owner, you have the responsibility to ensure you maintain your financial records. By picking the right bookkeeping system and maintaining multiple copies of your records, you’ll be covered in case the IRS comes knocking at your door.
With a team of expert bookkeepers on your side, you’ll never have to worry about the health of your business. With Grow Thrive Succeed, we help you organize your business finances so you don’t have to stress over the numbers and can focus on what you love.
