BizThreads:
* Organize a proper system. Keep different files where you can file invoices, receipts, payment vouchers etc. If you are running different businesses, ensure that their accounts are maintained separately. Mark all the files in bold and clear letters.
* Be perfect in maintaining cash transactions. Any bank transaction can be easily cross-checked and verified, but cash transactions without a proper receipt or accompanying voucher can look suspicious in the eyes of the IRS. Keep your cash transactions clear by maintaining a detailed record for each of them.
* Maintain your personal records. You should also maintain your personal records regarding the details of any stocks, mutual funds or property that you might own alone or jointly with your spouse.
* Records that should be maintained. Some records that should be maintained are credit card slips, cancelled checks, bank statements and invoices. Specifically for tax records, you should also keep all 1099 and W-2 forms.
* Make your system universal. Keep your filing system easy to understand so that your employees or other family members can find and file the records easily if need be.
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Very helpful information! The most important piece of advice is keeping your record keeping universal so that anyone can take up where you left off. Too many business owners have their own system so that when they retire or die and someone has to take over for them, it is next to impossible to make any sense out of what the original owner was thinking. Thanks for sharing this important information!