Keeping Good Records

The importance of keeping good financial records cannot be overstated. It's important:

• at tax time
• if you want to get financing,
• if you want to monitor your business's progress,
• if you ever want to sell your business, and
• if you just want to know where your money is coming from and going.

If you intend to keep good financial records, the only way to do it is to develop good recordkeeping habits from the very beginning. In all likelihood, if you start off with bad habits, you'll never get back on track. There are numerous software packages designed specifically to keep the books, and if you use computers in your business anyway, they should definitely be considered.

Your accountant should be able to advise you on the best way to set up your books. Before you talk to your accountant, however, you may want to learn as much as you can about how to manage your own business finances. A good place to start is with your basic bookkeeping.