If you are in charge of your organization's bookkeeping, you will definitely know that there are a number of benefits to keeping "audit-ready" books. Among the primary advantages is making sure that the correct amount of taxes owed are paid, and paid in a timely fashion. This keeps the government from assessing late payments and other charges. Maintaining complete and accurate books also gives you the peace of mind necessary to prevent unwanted stress and complications. Beyond that, it ensures that your company can stand up to the inspection of the most thorough auditor, even after the passage of several years.
Audit-ready books also enable a company to make more knowledgeable decisions on a time-sensitive basis. Let's face facts. The more accurate your business' financial statements are, the more reliably you will be in position to make decisions that benefit your business. Don't forget that it's important to have well-maintained books if you plan on getting a bank loan. Let's review some of the things to embrace when trying to improve your bookkeeping process.
Receipts are Vital
To truly keep accurate books, receipts are required to be filed on all purchases. Your receipts must match their matching entry in your books. All supporting documents must also be saved in a fashion that makes them easily accessible when it is tax time, or if you have to face an audit.
Don't Procrastinate with Your Bookkeeping
Your bookkeeping records must be be maintained regularly, such that it directly aligns with your business's activities. This means that if you have daily transactions, then your entries would be entered into your books daily.
Deadlines are Important
Many regulatory and governmental agencies require that certain records be submitted on a regular basis. Be certain that these types of due dates are met and that duplicates of any files you have sent in to these bureaus are saved in your books.
The Devils is in the Details
The majority of audits arise because the Internal Revenue Service has unearthed several faults or concerns with a company's bookkeeping records. This can be avoided by making sure that the earnings and costs of your business are properly documented and properly categorized.
Keep Extra Copies of Your Books
While you seek to make your books more audit-ready, please understand that proper storage of your accounting is one of the most critical things to consider. It is essential for you to maintain backup copies of your financial data, in case something could happen to the original copies, along with all associated paperwork. These secondary copies should be kept in a safe place, away from the original documents. If you ever experience a loss of data, these copies will be priceless and permit you to get your books ready to go easily.
If you keep the above recommendations in mind, you can feel comfortable that your bookkeeping is rock solid. If it turns out your accounting doesn't meet these specifications, it may be time to initiate practices which will enhance your bookkeeping up to these benchmarks.