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Permanent Link: http://ufdc.ufl.edu/IR00002525/00001
 Material Information
Title: Record Keeping
Physical Description: Fact Sheet
Creator: Torres, Nayda I.
Publisher: University of Florida Cooperative Extension Service, Institute of Food and Agriculture Sciences, EDIS
Place of Publication: Gainesville, Fla.
Publication Date: 1991
 Notes
Acquisition: Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Melanie Mercer.
Publication Status: Published
General Note: "Publication date: November 1991."
General Note: "HE 7111"
 Record Information
Source Institution: University of Florida Institutional Repository
Holding Location: University of Florida
Rights Management: All rights reserved by the submitter.
System ID: IR00002525:00001


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FactSheetHE7111 TheInstituteofFoodandAgriculturalSciencesisanequalopportunity/affirmativeactionemployerauthorizedtoprovideresearch,educational informationandotherservicesonlytoindividualsandinstitutionsthatfunctionwithoutregardtorace,color,sex,age,handicap,ornational origin.Forinformationonobtainingotherextensionpublications,contactyourcountyCooperativeExtensionServiceoffice. FloridaCooperativeExtensionService/InstituteofFoodandAgriculturalSciences/UniversityofFlorida/JohnT.Woeste,DeanRecordKeeping1 AdaptedbyNaydaI.TorresandGlennD.Israel2Moneyisthelifebloodofanybusiness.Keeping trackofitsflowcomingintoandgoingoutofyour businessisessentialtosurvival,growthandprofit. Butthetruthis,manybusinesspeopleseerecord keepingasanecessaryevilanddevoteaslittletimeto itaspossible.Infact,recordkeepingcanbea positiveexperiencewhenyougetinformationabout thebusinessthatisaccurate,organizedandup-todate.Thelawdoesnotrequireanyparticularmethod ofrecordkeeping.However,goodmanagementofa homebusinessrequiresgoodrecords.HOWTOSTARTBeforeyoustarttooperateyourbusiness,decide whowillkeeptherecordsyouorsomeoneelse. Frequently,theindividualbusinessownerwillkeep thebooks.Thatgivesabetterappreciationofwhat ishappeninginthebusinessandkeepsyoucurrent. Also,youbecomefamiliarwiththesystem. Sometimesanemployee,aspouseorotherfamily memberoroutsidebookkeepingoraccountingservice willdotherecordkeeping.Thisisusuallysatisfactory iftheindividualisqualified,keepsyouinformed,and keepsthebookscurrent.Regardlessofwhokeeps therecords,youmustreviewthemperiodicallyto knowwhatisgoingonandhowthebusinessisdoing. Knowandunderstandyourfinancialrecords. Yourrecordsshouldhelpyouto: identifysourcesofreceipts preventomissionofdeductibleexpenses determinedepreciationallowances takeadvantageofcapitalgainsandlosses establishearningsforself-employmenttax selectthetypeandarrangementofyourbooks that seemsuitableforyourtypeofbusiness figureyourcorrecttaxliability explainitemsreportedontaxforms documententertainment,travel,andother expensesrelatingtoyourbusiness Goodrecordsmustalsobepermanent,accurate andcomplete.Theymustclearlyshowincome, deductions,creditsandemployeeinformation. Furthermore,theymustbeavailabletoofficialsofthe InternalRevenueServiceforinspectionatanytime. Tomaintaingoodrecordsyoushould: retaincopiesofrecordsuntilstatuteoflimitation forthattypeofdocumenthasexpired 1.ThisdocumentisFactSheetHE7111,aseriesoftheHomeEconomicsDepartment,FloridaCooperativeExtensionService,InstituteofFood andAgriculturalSciences,UniversityofFlorida.Publicationdate:November1991.ItwasadaptedforuseinFlorida,withpermission,from adocumentoriginallycreatedbytheGeorgiaExtensionService. 2.NaydaI.Torres,AssociateProfessorandFamilyandConsumerEconomicsSpecialist,andGlennD.Israel,AssociateProfessorandProgram andEvaluationSpecialist,CooperativeExtensionService,InstituteofFoodandAgriculturalSciences,UniversityofFlorida,GainesvilleFL 32611.

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RecordKeeping Page2 storeallcanceledchecks,paidbillsandduplicate depositslipsinasafeplace depositallbusinessreceiptsinaseparatebank account makealldisbursementsbycheck Workwithanaccountantinsettingupagood recordkeepingsystem.Theirservicescansaveyou money.Theyareknowledgeableofexistingtaxlaws andchangesastheyoccur.Theycanadviseyouon longrangefinancialplanningandplansforexpanding yourbusiness. Keepyourrecordsystem: simpletouse easytounderstand reliable accurate consistent timelySIMPLERECORDKEEPINGSYSTEMArecordkeepingsystemneednottobe complicatedtobefunctional.Thefourbasicrecords youneedwhenyoubeginyourhomebusinessare salesrecords,cashreceipts,cashdisbursementsand accountsreceivable. Thereareanumberofone-write,duplicatecheck andpegboardsystemsavailablecommercially.Some arepreparedwithinstructionsandformsdesignedfor specifickindsofbusinesses;othersareforsmall businessuseingeneral.Youcanexaminesomeof thesesystemsatofficesupplystores.Inaddition, sometradeassociations,manufacturersand wholesalersofferspeciallydesignedrecordkeeping systemstotheirmembersorcustomers.TheSBA publication,"RecordKeepingSystems,"(SBB15)lists manysuchsystems.Youcangetacopyofitfromthe U.S.SmallBusinessAdministration. Useyourbusinesscheckbookasthesimplest systemforallfinancialtransactions.Recordthe detailsofthetransactiononeachdepositslip.Payall expendituresbychecksdrawnonanaccountkept strictlyforthebusinessandreconcileitmonthlyas soonasthebankstatementarrives.Recordpayments forinventory,supplies,employees'salaries,business travel,rent,utilitiesandotherexpensesinthe checkbookbydate,amount,payeeandpurpose.A bankchargeisenteredinthesamemannerasacheck thathasnochecknumber.MinimumRecordKeepingSystemIncludethefollowingelementsinwhateverrecord keepingsystemisused: IncomingMerchandise Copiesofpurchaseorderstosuppliers Verifiedpackinglistsorreceivinglog(when theordersarereceived) Inventorysheetsorrecord OutgoingMerchandise(orServices) Salesslips(cashandcharge) Workorder IncomingMoney Checkingdeposits Creditcustomers'accounts(accounts receivable) Invoices(accountspayable) OutgoingMoney Checkregister Pettycashvouchers ARecordofEquipmentandDepreciationExpandedRecordKeepingSystemAsyoumakeplanstoexpandyourbusiness, increaseyourrecordkeepingtoincludetheseten items: CashReceiptsJournals Recordsallcashreceived.

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RecordKeeping Page3CashDisbursementsJournal Recordsexpendituresandidentifieshowand whymoneywasspent,includingpettycash. SalesLedger Recordsandsummarizesmonthlyincome. PurchaseLedger Recordsthepurposeofmerchandisebought forprocessingorresale. PayrollLedger Recordswagesofemployeesandtheir deductionsforincometax,SocialSecurity, andother. EquipmentJournal Usedtoidentifyassetssuchasequipment, officefurniture,motorvehicles,fixtures,and othersalongwiththeirdepreciationschedule (besuretorecordtheserialandmodel numberofallequipment). InventoryLedger Recordstheinvestmentinstock(thisis necessaryinordertoarriveatatrueprofiton financialstatementsandfortaxpurposes). AccountsReceivableJournal Recordsthepaymentsandbalancesofcredit customers. AccountsPayableJournal Recordswhatthebusinessowesitscreditors andsuppliers. CheckRegister Keepstrackofallexpendituresbydate,name andamount.SOURCEGibbs,JanettA.andWilliamA.Thomas. Home Business.CooperativeExtensionService, UniversityofGeorgia. Rowe,BarbaraR.andMarionT.Bentley. AHome BasedBusinessWorkshop:Financial Recordkeeping.CooperativeExtensionService, UtahStateUniversity,1987.