Record Keeping and Financial Statements

Record Keeping

Successful and profitable businesses are ones which pay attention to all facets of their business, especially their accounting and record keeping functions. Improper accounting procedures rank among the top five reasons why businesses fail. Often, it helps if you look at your personal finances as "business". We can assist you in establishing and implementing systems and procedures which will ultimately contribute to your success.

After a thorough understanding of your operation, we can advise you as to which systems would best fit your needs. This may include computers and software or just a manual system which has all the proper checks and balances. For some software, we offer support after you purchase such items. The important concept is for you to keep proper records in the manner which best suits your needs.

Businesses as well as your personal life, by their nature, create a considerable amount of paperwork and records. Often these records are your lifeblood for future growth and stability. But then, questions arise as to how long to keep some records, which ones to keep, and where to keep them.

These issues vary with each person and business, but generally keep the following:

• Tax Records --- Keep taxable concerns on a year round basis for easy compilation at the end of the year for your tax appointment. By doing this, it will make your recall easier and will make it harder to lose important taxable deductions.
• What's Important --- All income received records; Expense items, especially work related ones; Investment purchases and sales; Interest and taxes paid; Charitable contributions; Medical expenses; Inherited property documentation; Sales, and refinancing records; All deferred programs such as IRA's or 401(k) plans.

Often it appears that this is a considerable amount of records, but then to make matters seem worse, how long should you keep these records?

The list here is fairly long and complex. Some of it is regulated by our government's statutes of limitations. Other considerations fall on your good judgment as to how long some records are of value to your business. Federal tax returns can be audited for up to three years after filing (six years if substantially underreported income is involved). Because of this, keep most records for six years after the return filing date.

Copies of your tax returns should probably be kept permanently. Partly because they don't generally take much room and partly because these returns can help on long term projects. Property improvements, contracts of real estate nature (buy/sell records), should be kept for seven years after the property is sold.

Financial Statements

We can prepare or aid in your preparation of financial statements for you. There are many types of financial statements and we can explain them all to you.

The important thing to remember about statements is that they must accurately reflect your business so that they may help you effectively manage your business. We can help you design your reports to maximize their advantages.

In your financial statements, do you know these terms and what they mean?

Current Ratio ---- Debt to Equity Ratio ---- Quick Ratio ---- Profit Margins ---- R.O.I.

If you would like help in designing or having us prepare financial statements, please

Call us: 620.342.7435

We don't charge for an initial conference. We can discuss your concerns and determine just how we can help you the best. Again, our primary responsibility is to make sure we can create value for our clients.