How to have effective records management for your small business
Every size and type of business faces the challenge of effective record keeping. However, for small businesses especially those that are just starting out this can be an even larger challenge. However, the good news is that there are tips that can help you set up an effective records management system that will get your small business started off on the right foot. These tips can also help you have the information that you need close at hand, while keeping clutter and confusion to a minimum. While it may not be the most exciting part of running a small business it is crucial. It is important to understand that when you implement steps of effective record keeping you can reduce the stress of running your small business and make it much easier to deal with. Here is what you need to know about how to have effective records management for your small business-
- Keep all records with technology-There are really no reasons anymore for a business of any size to keep manual records. Today, there is a multitude of options in the technology world that can allow you to keep all business records easily and effectively. Best of all, when you use technology to manage your records you can access the information that you need in an instant. No more looking through files and desk drawers. You can simply click on and have what you need in a few seconds. Best of all, there are many different price ranges for available technology which allows small businesses to be able to choose a record keeping system that fits within their budget. Once you have an effective records management system in place it makes your small business look more professional and helps to prevent problems when tax time rolls around.
- Keep personal and business expenses separate-Another extremely important component of small business record keeping is making sure that all business and personal expenses are separate. Far to often, small business owners who start out as sole proprietors fail to do this and end up with a tax nightmare. You must make sure that all expenses are recorded under the right categories. If you are unsure you should educate yourself as to what is a legitimate business expense. This will help you to keep your small business records in the most accurate manner possible. Keep in mind that if you are audited it can be even more difficult to prove legitimate business expenses if you have not kept them separate from personal ones.
- Keep a separate business bank account and credit cards-Another common record keeping mistake is not having a separate business bank account and separate business credit cards. New small business owners often make the mistake of thinking that it really doesn't matter if they mix their business banking with personal or put business charges on their personal credit cards. Business finance experts stress that this is always a mistake. Keep in mind that if you are not sure of what kind of business bank account to open or how to get a business credit card you should work with a bank that has a business division. Banks that have a business division most often employ business specialists that can guide you through the process of opening a business bank account and getting a business credit card. This can also help you in establishing a relationship with your business bank that can be helpful in the years to come. Finally, once you have a business bank account and business credit card you will need to train yourself to use them for business purposes only.