Small business owners already have a lot on their plates, and they don’t need to be rushing around their offices looking for a critical invoice or a tax document. But someone needs to make the commitment to good accounting in order to get an accurate financial picture. You will need to make the commitment to keeping impeccable records, and these business record keeping tips can help make the process easier:

Hire a pro. Someone has to keep the books for you because you will be so busy running your business. The pro should be able to advise you on your bookkeeping system and method of accounting (single-entry versus double-entry). Even with a pro, you must keep your information organized so it is easy for your accountant to evaluate.

Keep a spending diary for yourself. When buying for business, write down what you bought and how much you paid for it. When you are figuring out deductions, you may be surprised by how many you can take.

Hang on to the little things. Even if you keep a spending diary, hang on to the supporting documents. With receipts in particular, the paperwork will seem maddening, but you will think an extra business records storage is worth it when it is time to take itemized deductions.

Use a folder system. Those small little receipts have a tendency to disappear, so set up a folder system for each month or each week, depending on how much business spending you do. Also ask your accountant or bookkeeper about their preferred means of business records management.

Separate income and expenses. Have income (invoices, bank deposits) in one place and expenses (canceled checks, account statements) in another so you can think of what is going in and what is coming out.

Don’t forget your employees. Keep files on each of them, including freelancers. According to the IRS, you need to keep employee records for at least four years, so don’t toss a file on an employee who has left just yet.

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