Professional Accounting Services in Las Vegas, NV - LLB CPA

Call to Request a Free Consultation: (702) 471-7223
Contact | About Us | Meet the Team | Calculators | Client Portal
  • Home
  • Accounting
    • Las Vegas Forensic Accounting
  • Bookkeeping
    • QuickBooks Accountant
  • Tax Services
  • Business Setup
  • Contact Us
  • Reviews
  • Blog
    • Accounting Glossary

July 1, 2013 By Larry L. Bertsch, CPA and Associates

Importance of Good Record Keeping

Good record keeping is key for a successful business. Every person involved in business needs to keep records and the more organized the records the better the information you can retrieve from those records. Per the IRS, good records will help with the following:

  • Monitor the progress of your business

  • Prepare your financial statements

  • Identify source of receipts

  • Keep track of deductible expenses

  • Maintain business asset list

  • Prepare your tax returns and Support items reported on tax returns

Let’s take each of the points above and explain why it is important to have good records.

Let us handle your books while you work on your Las Vegas business.
Get started with a free consultation. Call (702) 471-7223 today.

Monitor the progress of your business

To monitor the success of your business you need to keep good records. Records can indicate whether your business is improving or declining, do you have a product selling better than another, which expenses can you do without or decrease, how can I increase my profit. Maintaining good records will help you answer those questions and can increase your chances of having a successful business.

Prepare your financial statements

To prepare accurate financial statements you need to have good records. Financial statements will help you manage your business. The income statement (profit and loss), balance sheet and cash flow statement are examples of financial reports you need to monitor your business. Banks or creditors often ask for financial statements so it is important to maintain accurate books on a timely basis.

Identify source of receipts

Money coming into the business may take several forms; income from business operations or sales, interest income, or income from the sale of business property. In order to report income properly on tax returns it is important to understand where the receipts (incoming money) is coming from. Your records will identify where the money is coming from and where it should be reported on your tax returns. Examples of documents to support income are:

  • Bank deposit slips

  • Copies of customer checks

  • Cash register tapes

  • Invoices

  • Credit card charge slips

Keep track of deductible expenses

Nobody wants to under report expenses. If you don’t track and record your expenses when they occur you may forget expenses and not properly account for your business expenses. Examples of source documents for expenses:

  • Cancelled checks

  • Invoices from vendors

  • Credit card receipts

  • Cash register sales slips

  • Petty cash records

For meals and entertainment you must substantiate/prove the expense is business related. For example: the receipt from the business meal needs to be noted with who attended and reason for the business meal.

Maintain business asset list

Assets of a business may include, but not limited to cash, bank accounts, fixed assets such as furniture and equipment and real property consisting of land and buildings. For instance, proper documentation for any real property is necessary to be able to compute the correct cost basis of the asset, to calculate proper depreciation on a tax basis and or to determine the proper gain or loss if the asset is sold. Documents to keep for assets includes:

  • Purchase invoice

  • Real estate closing statements

  • Cancelled checks

  • Cost of any improvements

  • Section 179 depreciation taken

  • Depreciation deductions

  • Deductions for casualty losses

  • How you used the asset and business percentage

  • When and how you disposed of the asset

  • Selling price

  • Cost of sale

Prepare your tax returns and support items reported on tax returns

To prepare an accurate tax return you need good records.  Income, expenses and credits you report on your tax return need to be supported by the records you keep.  Generally, these are the same records you use to monitor your business and prepare your financial statement. The records must be available at all times for inspection by the IRS.  If the return is under examination by the IRS, you may be asked to explain and show supporting documents for the items reported.  A complete set of records will speed up the examination.

Call Us at (702) 471-7223 for a Free Consultation
Offering a full range of accounting and small business financial management services.

Filed Under: Bookkeeping Tagged With: business asset list, deductible expenses, financial statements, good record keeping, tax returns

  • This field is for validation purposes and should be left unchanged.

Larry L. Bertsch CPA Services

  • Tax Preparation Services
  • Bookkeeping Services
  • QuickBooks Accountant
  • Small Business Accounting
  • Business Planning
Larry L. Bertsch, CPA & Associates, LLP
265 E Warm Springs Rd, #104, Las Vegas, NV 89119
Phone: (702) 471-7223

Larry L. Bertsch, CPA & Associates, LLP

265 E Warm Springs Rd, #104, Las Vegas, NV 89119

Phone: (702) 471-7223

  • Facebook
  • Google+
  • LinkedIn
  • Twitter
  • Privacy Policy
  • Sitemap
COPYRIGHT © 2021 LLBCPA