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All of the numbers that are going into your books need to be backed up by something that will document them. You or someone else will at some point need to go back and recreate something you've entered, and you need a good clean system for keeping this information. If you are ever audited by the IRS, they will want to see the paper documentation behind your computer accounts.

Keep a list of what makes up Accounts Payable, of customer deposits, accounts receivable, and your assets. Update your list monthly. You need to be able to justify each number on your balance sheet. It's not nearly as intimidating as it sounds, and it will save you hours of work at some later date.

You will also need to keep good supporting documentation for your income and expenses. For a more comprehensive discussion of the types of records you need to keep, check out What Records Should I Keep.

 

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