When you own a small business, it is imperative that you keep a good set of books that are consistently and contemporaneously updated. The tax man will not be satisfied with records that were thrown together at the end of a year.

Tax preparation is a key reason to maintain a detailed set of books, but there are other factors at play. It’s important to know how much money your business is bringing in along with how and where the money is being spent. Compare your results to industry standards to determine where you need to improve your business model. You should also compare this year’s sales and expenses to the prior year(s) to note your progress in the business world. Reviewing this year’s balance sheet accounts (cash, receivables, liabilities, etc.) to prior years will also help establish profit and sales goals. [Read Full Article].

Source: Why Your Business Needs Bookkeeping | Fox Small Business Center