Being diligent with your paperwork can go a long way towards your company reaching its goals, and proper record keeping might even save you some money in the long run too. By staying organized and creating a wealth of information about your company, you can measure trends, pinpoint areas succeeding or lagging, and keep track of deductibles for tax season.
Financial statements like income statements and balance sheets are an excellent place to start. Income statements show your company's income and expenses during a specific period, while balance sheets are used to record assets, liabilities, and equity.
It’s also a good idea to record your corporation’s sources of income and deductible expenses as they occur for your tax return. Knowing your sources of income is obviously valuable information for business planning, but it also helps you divide taxable income from the nontaxable. Furthermore, documenting deductibles eliminates the risk of forgetting about expenses that you can use to save money on your tax return.