How to Keep Financial Records For Your Business



The significance of maintaining accurate financial records

Financial record keeping has long been a vital component of all  commercial activity for entrepreneurs, corporations, and business groups. In actuality, it is crucial for  both  business expansion and sustainability.


Any business relies on its records and papers to function, thus it is essential to keep, protect, and manage them so that they can be accessible in the future to support corporate expansion. Any type of organization intending to eventually develop needs to maintain and

regularize its financial records, regardless of the industry you work in


The benefits of maintaining accurate financial records;


1. Enables you to control the  expansion of your business


You may determine whether your  business is growing successfully or  not by looking at physical records like statements, audit books, sales and  purchase reports. It provides a  window for accurate verification, enabling you to find the gaps and create corporate policies that are focused on the market. Keeping accurate financial records will enable you to monitor your company's  success.


2. Enables the creation of accurate financial accounts and reports with  ease


The comprehensive availability of various commercial papers such as the profit and loss statements are guaranteed by accurate financial records. In order to create accurate financial statements, these records  are beneficial.


3. Provides easy access to crucial  information and data


Because it's in our nature to forget

When a transaction takes place,  dishonest clients who have a history of incurring debt would want to take advantage of this. Reviewing our book of records is the only way to get to the bottom of things.


4. Enables quick access to grants and loans


In order to avoid going out of business, there's a need to obtain loans from the bank or grants from an angel investor. Before the banks or institutions will approve your loan request, you will need to submit financial documents that demonstrate your business growth, strengths, predictions, etc. in order to obtain these loans or grants. If your company doesn't maintain these records, it will be in an undesirable position.


5. Aids in the filing of accurate tax  and levies documentation


Taxes are a necessary component of an economy since they fund government spending, therefore businesses are compelled to pay them. You need accurate financial records to demonstrate your income, expenses, and other financial information in order to determine the correct tax amount your business must pay. With the use of these documents, the company will be able to avoid an overcharge from the relevant tax body.


The income statement


The income statement is a document showing a detailed calculation of your revenue since inception or as a newly launched business that has not made any revenue yet, the financial plan helps to forecast the figures you're likely to make monthly or yearly. With the financial plan you'll be able to predict your losses or profits.


A well detailed report of your income statement and financial forecasting will go a long way to get you Investor ready.

Financial Report Data


Below are the vital data investors look out for from a financial analysis;


  •  B2B Sales

  •  B2C Sales

  • Cost of Goods Sold (COGS)

  •  Earnings Before Taxes (EBT)

  • Expenses

  •  Gross Profit

  •  Net Profit

  • Revenue

  • Taxes

  • Total Expenses

  • Total Revenues


It takes a lot of work to calculate an income statement, and as a business owner, you probably have more important things to take care of in your company. So leave that work to us. We at Brawndy Business School are a reputable business consulting firm that works with small businesses just like yours. Regardless of how many financial transactions you've had since inception, we will work on it and produce a 3-year forecast for your company. Click Here to get us to prepare one for you.


In conclusion, maintaining records is crucial for organizations, whether they are used to track financial or operational activity. Any small, medium, or large corporation that wants to develop into a respectable institution cannot ignore them because they act as the memory of the company.


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