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Keeping Business

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35 views28 pages

Keeping Business

Uploaded by

nikkagonzalesstaana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Q2 Lesson 7

Business
Records
Learning objectives:
•Identify the reasons for
keeping business records.
•Discuss the different
types of records for
accounting and tax
purposes.
•Enumerate the best
practices and record
keeping.
Business record
❑Is a document (hard copy
or digital) that records
business dealing.
❑Includes meeting
minutes, memoranda,
employment contracts,
and accounting source
documents.
Importance of Keeping Good Records:
1. Monitor the progress of the business
2. Prepare the financial statements
3. Identify sources of income
4. Keep track of the deductible expenses
5. Keep track of the basis in property
6. Prepare the tax returns
7. Support items reported on the tax
returns
Importance of Keeping Good Records:

1.Monitor the progress of the


business
The good records need to monitor
the progress of a business. Records
can show whether the business is
improving, which items are selling,
or what changes the need to make.*
Importance of Keeping Good Records:

2. Prepare the Financial Statements


These include income(profit and
loss) statements and balance
sheets. These statements can help
in dealing with the bank or creditors
and help manage the business.*
Importance of Keeping Good Records:

2. Prepare the Financial Statements


Income statement – shows the income and
expenses of the business for a given period
of time.

Balance sheet – shows the assets, liabilities,


and equity in the business on a given date.
Importance of Keeping Good Records:

3. Identify Sources of Income


The money or property will
receive from many sources. The
records can identify the sources of
income. This information will help
to separate business from non-
business receipts and taxable from
non-taxable income.
Importance of Keeping Good Records:

4. Keep track of the


Deductible Expenses
Keep the record especially
the expenses will greatly
needed when preparing the
tax return.
Importance of Keeping Good Records:

5. Keep track as the Basis in


Property
The basis will be used to figure
the gain or loss on the sale,
exchange, or other disposition of
property, as well as deductions
for depreciation, amortization,
depletion, and casualty losses.
Importance of Keeping Good Records:
6. Prepare the Tax return
Types of Records for accounting and tax
purposes:
• Business expenses
• Petty cash
• Credit card statements
• Vehicle use log
• Bank statements
• Travel log
• Annual tax returns
• Cash register tapes
• Quarterly tax filings
• Credit card sales
• Payroll receipts
• Inventory • Invoices
• Sales • Cancelled checks
• Income • Check stubs
Importance of Keeping Good Records:
7. Support items reported
on the tax returns
Other Records:
• Purchase orders • Accident reports
• Employment applications • Articles of incorporation
• Emails and other business • Permits
communications • Licenses
• Inventory logs • Trademark registrations
• Personnel records and patents
Financial forms/records:
1. Accounts Receivables
These are valuable not only
to decision on extension of
credits but also to make
accurate billing and
maintenance of good
relations with customers.*
Financial forms/records:
2. Inventory records
These records will
be used to control
your inventory
items.
Financial forms/records:
3. Accounting Payable
These liability record show
what your firm owes,
facilitates obtaining of
available cash discounts and
informs you when payments
are due.
Financial forms/records:
4. Sales Records
These could be used in the
analysis of the effectiveness
in advertising and
promotions of your
products, market coverage
and profitability.*
Financial forms/records:
5. Production Records
These records provide basis
for your product costing and
detect lost profits/costs as a
result of idle
manpower/machineries.
Financial forms/records:
6. Payroll Records
Shows the total
payments you pay your
employees and provide
a basis for computing
some legal payments.
Financial forms/records:
7. Cash Records
Shows all receipts and
disbursements made by
your firm. They contain
your firms cash flow and
petty cash balances.
Financial forms/records:
8. Other Accounting
Records
•Insurance registers
•Leasehold records
•Investment records
Best Practice and Record Keeping
Depending on the industry, keeping the following records may
be a legal requirement, but it is best practice to keep them for
5-7 years:
1. Employees accreditation certificates and
licenses – copies of permits, registrations, and
licenses of employees who need to do their
jobs
2. Employees resumes and job applications
Best Practice and Record Keeping
3. Performance reviews – include assessments
of staff performance and agreements between
you and your employees.
4. Position statements and job advertisements
5. Customer records – personal details, product
purchased and product inquiries that are useful
for finding new customers.
Best Practice and Record Keeping
6. Customer complaints – details of complaints
about products, services, staff or anything else,
and steps taken to resolve them
7. Details of any disputes with other businesses –
including how you went about resolving disputes.
8. Quotes given and won – specifics of jobs and
time spent on them to help with future quoting
Best Practice and Record Keeping
9. Details of advertising campaigns and success
– to make it easier to repeat advertisements and
plan future advertising campaigns.

10.Insurance policies – a regular review and


update of your business insurance, especially
when your business grows or changes.
Daily Tasks
1. Review available cash
2. Monitor Incoming and outgoing
payments

Weekly Tasks
1. Record and reconcile transactions
2. File and upload receipts
3. Enter unpaid bills from vendors
4. Pay vendors
5. Prepare and send invoices
6. Review projected cash flow
Words to ponder!

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