The Importance of Record-Keeping for a Business Owner
Good record-keeping is essential for any business owner. Whether you’re managing your expenses, understanding legal principles could be for regulatory or tax reasons, or simply improving your business management. Collecting, storing, and effectively utilising your business information is crucial.
So why do you keep track of your data? What data should you store and how long should the recorded data stay in your database?
Keeping Records to Improve Management
Business experts often advise that the key to growing is setting appropriate targets or SMART goals. When we talk about record keeping, the key here is the M, or measurable. Without sufficient data, it would be impossible to measure your current stance and how to go about it.
Financial records of data such as expenses, revenues, and profits should be accessible from your accounting system. Information about the work you’ve done, for which client, what’s the due date and when it should be readily available from your job management system, whilst information of customers should be made available from your Customer Relationship Management (CRM) system if you have one.
Talking about keeping the financial records safe, there’s an app exclusively designed for small and medium-sized businesses. It goes by the name Udhaar App.
Udhaar is a credit management app for retail and wholesale business owners who generally do not involve cash in their transactions. Once the transaction takes place on credit, the app will remember it till the time the payment is recovered. Not only that, but it will also send an automated text to all those customers whose payments are due along with the deadline and transaction details.
Creating an Expert System For Employees to Expand and Develop
Saving information so your employees can retrieve it can help them grow, learn, and evolve. Simply encouraging your employees by making key information accessible to them can also help them make decisions without any assistance.
Keeping Good Records to Utilise Time More Effectively
The famous author Michael Gerber in his book ‘The E-myth revisited – Why most small businesses fail and what to do about it’, emphasizes that one of the reasons businesses don’t succeed is that the owners allot too much time for daily routine tasks.
Using a job management system to keep a track of what tasks have already been done and when is the next task due can help determine where your time is being spent and where you should spend it for more productivity.
How Long Should You Retain Information?
With the dropping costs of data storage and retrieval, essentially the information must be kept indefinitely. Also to abide by legal regulations, if you’re a partnership or a sole-proprietor, you have to keep your records for at least five years. Whereas Corporations are advised to keep their Tax records for at least six years from the end of that accounting period.
To sum up, when running your business it’s significantly important to maintain useful records. However, it’s not just about storing information, you also need the management systems and processes to efficiently use and analyze those records.