Striving everyday for bread and butter and ignoring the need to nurture your source of income with all the legal documents is nothing but complete foolishness. Business is everything for you and your family. Jotting down from food, clothing, house to the level of investment for the future of your kids is all based on your business. And being easy on it by not keeping the record will make you land in a fearsome situation later. Legal procedure is what is necessary to follow while doing business whilst being on the safer side is always a smarter move.
Various record systems can be used to maintain proper documents. Some follow electronic accounting software programs to keep their records and other use simple ledgers, accounting method, journals etc. Whatever method you choose, be sure that you have recorded each transaction of yours and the documents of any deal between you and the other person. This will be your lifesaver when to pay taxes. The invoices and receipts are the documents generated for records along with the payrolls, slips, cancelled checks etc. all these are mandatory and none can be ignored at all.
In order to flourish your business, following are some types of business document records you should keep to be on the safer side. Keep all the records in an orderly manner either by arranging them in yearly pattern or monthly pattern. Separate files with headings should be used to keep separate documents.
Purchases Made: If you are a buyer or manufacturer, then the full up to date records in the form of invoices, cancelled checks, registers should be maintained mentioning how much amount was paid to buy the products etc. The payment methods used to pay the party should be mentioned along with full receiving documents by other party.
Expenses: Other than buying raw material, the transportation cost, cost of labour, and any other form of expenditure is incurred under this category. You need to make sure by keeping account details, mentioning in registers what amount was used for this category, any cancelled checks, credit card slips, invoices and ledgers.
Gross Income: Now everyone works for the profit but to calculate it, you need to maintain the record of what amount you received back through the sales in whole. Then only you will calculate the profits later. Keep a record in the same way as mentioned in above two points along with keeping bank details, separate forms are to be maintained, receipt books etc.
Assets: After installing various machinery, furniture and other solid items required for your business, these need to be recorded. How much you spend in buying them and what depreciation, you have to calculate in the end will depend on these documents. Also this is helpful when later you have to resell your machinery in order to see how much loss or gain you made through that.
Employment Taxes: Last but not the least, remember labour union has strong advantage when it comes to employment and if you want to play a safer game, then keep an up to date record of their salaries and stuff. You have to pay certain taxes in regard to this but can be done only when you have clear picture of your expenses in this field.
So keeping in mind all the above points, start up your venture and make it as strong legally with documents as you can whilst be the safe business owner. Work safe!