Business Records

What do you call Good Records?
A business that fails to keep accurate and complete records places its long term success and its very survival in grave doubt. There are 3 main reasons why records must be good (complete and accurate) records so as to be of value to the success of the business.

  1. Business Position
    Good records will provide the information that you need to be able to operate your business more efficiently and profitably. Good records enable your advisers to identify what you own, and what you owe and the income and expenses of your business.

  2. Regulations
    Good records are needed for the preparation of accurate information required by government departments such as the Tax Department. You need good records to ensure you pay the correct amount of Sales Tax and other taxes. They must be clear enough for the Tax Inspectors to carry out a “no problems” audit if required.

  3. Final Accounts
    Good records are necessary to enable your accountant to complete accurate Financial Accounts such as Revenue Statements (or Profit and Loss Accounts) and Balance Sheets as well as Cash Flows Statements. Accurate Financial Accounts present a clear picture of your business operation and provides you with the correct data for making business decisions in your business.

Records Contribute to Success
You will need to keep accurate records because they contribute to the success of your venture.

Good records contribute in the following ways.

  • Enable your cash to be controlled
  • Enable full financial accounts to be prepared
  • Enables your business to monitor its finances from day to day
  • Keeps close track of all operations of your business
  • They enable your actual performance to be measured against your plan
  • Should highlight problems and other opportunities that arise along the way
  • Enables you to have quick access to information that is important for business decisions.
  • Good records will save you a lot of time and effort
  • Good records will, in some cases be the saviour of your business where legal action has been against it. undertaken (good records can be especially critical when it comes to legal fights or court actions)
  • Enables your obligations to the Tax Department and to other regulations to be met

Benefits of Keeping Accurate Records
As soon as you decide to go into business, it’s important you start keeping your records. This is because it’s much harder to work backwards at a later date. If you’re going to make a success of running your business or organisation, you need to keep accurate records. Though there are legal reasons for keeping accurate records, there are also good business reasons to do so.

Features of a Good Record Keeping System
The features of a good record keeping system are:

  • Accurate
  • Clear and Simple
  • Thorough
  • Easily accessed
  • Easy to use
  • Meets all the needs of the size and nature of your business
  • Can be filtered into a part of the daily routines of your business

Setting up a record keeping system is not difficult. There is a lot of information available that can assist you in this regard.

Some of this information is well documented within the Start Run Grow website. If you need extra help then you should talk to your accountant or other business adviser so that you are able to set up a record keeping system at low cost yet be adequate to meet the needs of your growing operation.