If you have a chance to win a million dollars by presenting your business’s last year’s records, would you win it? Unfortunately, most small and medium business owners will miss out on this huge payout. The reason is that they don’t see record keeping as an essential part of managing a company.
Maybe no one will ever give you a chance to win this kind of money, but record keeping offers many tremendous benefits. Yes, it may be tiresome and boring, but it’s an integral tool for all companies.
Need convincing? Keep reading to see the importance of record keeping for your business.
Preparation of Financial Statements
To prepare financial statements, you’ll need to compile the business records for the period. It’s a headache doing this work without the proper records. In addition, you’ll have to estimate items like your purchases or sales for the year.
Proper record keeping simplifies this work and allows you to get an accurate image of your business’s financial position.
Identifications of Deductible Expenses
Did you know that the IRS allows you to deduct some expenses from your gross income? That means that you’ll reduce the amount of tax you pay for the period. However, during a tax audit, the IRS may request records on the deductible expenses.
Without these records, you may face problems with the IRS, which interrupts your business processes. To avoid these challenges, invest in proper business record keeping. The idea is to have documents that you can present to the IRS if requested.
Improves Business Data Confidentiality and Security
Unauthorized persons may exploit your loose record keeping system accessing sensitive business information. For example, they may access your employees’ payroll and other confidential information. Therefore, you must take measures to curb this data threat and enhance privacy.
So, what’s the best way to get rid of business paper records that you no longer need? Shred them. Simply throwing documents away can put your confidential documents in the wrong hands. Instead, work with a company that offers reliable on-site and off-site documents shredding services to ensure that company records and confidential information are protected.
Increase the Business’s Financing Options
The survival and success of your small business will depend on the available financing options. The idea is to get loans quickly for business expansion or other growth activities. However, to get the funding, you’ll need to present the business’s financial records.
The lenders want to evaluate your company’s creditworthiness and see if you can afford to repay the loan. Without the necessary financial records, you’ll miss out on chances to secure business financing. That’s why you should invest in a reliable data management system to ease record keeping in your business.
Reap the Benefits of Proper Record Keeping by Seeking the Help of a Professional Company
Your business records hold sensitive data that you can use to enhance growth and you must protect this data from people with ill motives. To ease record keeping, it’s essential that you seek the services of other top companies.
Call us today for document shredding services, to properly dispose of your company’s confidential paper records.