Everyone whether a small organization or big has to keep record. Bookkeeping is important for helping you maintain accurate financial records. Yet still, many businesses fail to implement this integral process. A badly done record keeping could cause some serious pitfall for a business owner. You are required under law to maintain accurate books and records, doing so will save you frustration later on.

Project your estimated tax payments

As a business owner, a large part of your income comes from your business, so it is important for one to fill your personal tax return. During that first year of business you will require to project your tax liability which could help you make estimated tax payments. Estimated tax is used to pay income tax and self-employment tax, as well as other taxes and amounts reported on your tax return.

Prepare your financial statements

Bookkeeping is important as it helps you to prepare accurate financial statements. When income and expenses are properly organized, it makes it easier to review financial resources and expenses. These include income (profit and loss) statements and balance sheets. These statements can help you in dealing with your bank or creditors and help you manage your business.

Keep track of deductible expenses

It is good things to have a system which can you keep track of your deductible expenses. If you don't keep your receipts you may forget expenses when you prepare your tax return, unless you record them when they occur.

Monitor the progress of your business

You need good records to monitor the progress of your business. Records can show whether your business is improving, which items are selling, or what changes you need to make. Good records can increase the likelihood of business success. For example there are things such as excel spread sheet, Online Pay stub generator, which store information and analyze data for us to keep us on top of things throughout the years.