When you implement proper accounting practices in your business operations, chances are your decision-making process can improve dramatically – accounting is, after all, an invaluable management tool, and few businesses will ever thrive without establishing a proper bookkeeping and accounting process.
Accounting is not just necessary for the health and growth of your business; it’s also required by law – and storing and archiving those records is a part of it. The proper storage and archiving of records does not just help you gain information in the long term, it also helps you stay in line with government requirements and taxation laws. For all those with questions: here’s how to properly store and archive your business’ invoices.
Why store invoices?
It’s normal to think of storing invoices as a matter of inconvenience – after all, they do take up a lot of space and do require a classification system that (when everything goes according to plan) takes up a lot more effort than it seems to be worth.
Think of storing as a good insurance system – it’s something you don’t need until things go wrong. If you’re ever the target of an investigation or audit, you have the evidence. If ever you’re in trouble with your finances and need to understand the root of it, you’ve got your research material. Your invoices should be stored, and for good reason.
When you have a supplier, a contractor, a vendor, or a service provider billing you, store the invoice in a certain file so that you can cross-check this with the order you put in, and so you are always up-to-date with things that need to be paid. Note it on your calendar.
In the same way, classify all the invoices that you send out and make a note of the due dates in your agenda. It will ensure you are up-to-date at all times.
Keeping timetables for your invoices in the short term is useful for understanding which accounts are due and which should be received soon. It’s also useful in the long term to see which no longer need to be stored.
It may seem like a hassle that you are obligated to keep various records for a certain period of time (for years), but it would be disadvantageous to look at it that way. In fact, keeping your records gives you many benefits. First of all, there are times when you will have to go back and learn from the past – when the invoices are there, they’re available for analysis. Secondly – and this is often an understated virtue – you will be in the clear in case you ever come under auditing procedures; it’s an insurance policy for your own good. Keep the records safe; do the proper thing. Learn and gain, as accountants central London from GSM & Co. confirm.
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