Keeping Business Records To Organize Your Online Business
Posted in Keeping Business Records
Starting an online business can be such an exciting adventure that some people forget about one of the most important factors for success – keeping business records. Your home based online business is just like an offline business and you will be required to file a tax return each year so keeping business records is vital for this as well as to organize your online business.
There is nothing difficult about keeping business records and there are numerous software programs which you can use to do this. Try to keep all your business financial transactions separate from your personal ones – in a separate bank account as well. This business bank account will then act as a base from which you can analyse your business finances. Keep all your receipts and any paperwork relating to any financial transactions.
Some things you will need to be keeping business records for are
- All your expenses related to your business like stationery, computer consumables, hosting costs, domain registration costs, article submission costs, coaching, outsourcing expenses, information products purchased, software purchased
- All your sales income – which might be sales of your own products or commissions received for affiliate products
- Home office expenses- a percentage of your telephone bill, lights and water, rent etc
- Motor Vehicle expenses – you will need to keep a log book to enter mileage for business trips such as attending a conference
What benefits can you expect to see as a result of keeping business records?
If you start keeping business records as soon as you start an online business the process of filing your tax return becomes so much easier. If you complete your own tax form then you will find all the details you need are to hand in the business records you have been keeping! Even if you do nt do this work yourself but pass it on to a bookkeeper you will find that she will spend less time on your books as a great deal of the time consuming work has been done just by keeping business records.
As a former bookkeeper myself – I can tell you it is so much easier to write up a set of financial statements when all the records have been filed and written up in an organized fashion. This is where a lot of the time will be spent by your bookkeeper so if you do most of it you will reduce your bill considerably.
In addition, the process of keeping business records helps to organize your online business and that will give you a feeling of confidence and saves you time too. By keeping business records of other data besides financial ones you can see how your business is faring in certain areas and determine which activities are generating revenue for you.
If you would like to organize your online business by keeping business records you can learn more about how to do this at Organize Your Online Business Guide