As we approach the end of the calendar year, it’s the perfect time to evaluate your recordkeeping habits. Staying organized doesn’t require an elaborate filing system, but having accessible and complete records can save you time, stress, and potential penalties if questions arise.
Here are some practical tips to help you get your small business records in order:
Save and Archive Your Receipts
Receipts are a cornerstone of your business records. They substantiate expenses and support tax deductions. Here’s how to manage them effectively:
Paper Receipts: Store them in a safe, organized manner. An accordion folder or simple labeled envelopes sorted by month or category can work well. If paper isn’t your preference, consider digitizing them.
Electronic Receipts: Create a designated folder on your computer or cloud storage where you can save emailed or scanned receipts. Naming files consistently (e.g., "2023-12-OfficeSupplyPurchase.pdf") can make them easier to locate later.
Whether paper or digital, your receipts should be kept for at least seven years.
Maintain Mileage Logs
If you use a vehicle for business purposes, maintaining a mileage log is essential for claiming deductions. The IRS requires detailed records that include:
The date of travel
The starting and ending mileage
The purpose of the trip
Apps like MileIQ or TripLog can make this process seamless, but a physical logbook works just as well. Make sure to archive your mileage records annually to preserve your documentation.
Don’t Lose Data When Switching Vendors
If you’re planning to switch service providers—whether it’s a payroll service, accounting platform, bank, or another vendor that maintains records—take steps to archive your data first. Vendors often don’t guarantee long-term access to historical records after you close your account. For example, if you’re changing banks, be sure to download and archive bank statements and credit card statements. To avoid losing valuable information:
Download and save all reports, statements, and supporting documents before making the switch.
Confirm you’ve captured everything, such as tax filings, employee pay stubs, and bank statements.
Store these records securely, just as you would your receipts and logs.
Simplify and Stay Consistent
The key to effective recordkeeping is consistency. While you don’t need an intricate system, you do need to ensure that:
Records are stored in a way that’s easy for you (or someone you trust) to retrieve when needed.
Digital records are backed up regularly to prevent loss.
Questions
With these straightforward practices, you’ll set yourself up for a stress-free year-end and a strong finish to 2024 and a strong start to 2025. If you have any questions about recordkeeping or need help implementing these strategies, feel free to reach out to TrueBlaze Advisors so we can help. Keeping your financial records in shape doesn’t have to be overwhelming, and we’re here to help!