Give three reasons to keep good records every day.
What will be an ideal response?
Keeping good records will show you how to make your business more profitable. Perhaps you are making less profit this month than last. Did your expenses go up? Were your revenues down? Maybe you are spending too much in one area. Accurate records can identify which area needs attention.
Keeping good records proves that payments have been made. Records prevent arguments, because they prove bills have been paid or that a customer has paid you. Records also prove that you have paid your taxes, which is quite useful in case the Internal Revenue Service conducts an audit of your tax returns.
Keeping good records will prove that your business is profitable. If you want investors
in your business, or people to loan you money, then showing that your business is profitable from accurate records can only help your cause. You must always maintain an up-to-date income statement and balance sheet in order to be able to calculate accurate Return on Investment and Return on Sales.
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