The year was 1998 and I was only caring for one child. In fact, having one child enrolled, only brought in over $300 a month in income for my childcare business. That was not very much money to manage, however, it was a humble beginning and a start to managing income and expenses in my business. Moreover, as the business grew, I realized the importance of managing my income and expenses.
In the start-up days of my childcare business, I maintained my business expenses on a hand written ledger and I must say that I am so grateful for financial software today!
Over the years, I realized that if you did not keep a close eye on the financial status of your business and maintain your records, that you will not be prepared at tax time.
I am going to share with you six practical ways to maintain your receipts and financial records:
- Create folders for Business Income, Car expenses, food expenses, payroll taxes, credit card payments, utilities, classroom expenses, maintenance,etc. I think you get the picture. This system is great, in the event you need to review your expenses.
- Schedule a time once a week to enter your income and expenses into a computerized financial software program. When you enter receipts into the computer, the computer does the calculating and generates financial reports for you.
- Back-up financial records to a back-up hard drive. In the event of a computer, you will not be at risk of losing your financial records.
- Keep Financial Records for at least 10 years in the event of an Audit.
- Review your bank statements at least once a month, to assure that you have deducted every possible business expense. This is a great way to find more expenses.
- Keep Your Payroll and Tax Return Records in a Locked file cabinet. This protects your employees identity and assures that no one has access to your tax information.
I look forward to your feedback on the record keeping strategies in this post. Be sure to leave your comment below.
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