Useful Record-Keeping Tips


Image courtesy of Stuart Miles/ FreeDigitalPhotos.net

Continuation from: The Importance of Record-Keeping: The Tax Perspective

Because record-keeping is so crucial to almost all aspects of a business, what is the preferred way of keeping records? Generally, any records system is acceptable as long as it clearly identifies your business income and expenses. Here are some useful record-keeping tips that can help you in the record-keeping for your business:

Update Daily

Daily updates keep you from being buried under a mountain of paperwork at the end of the month or at the end of the financial year. In addition, updating your business records daily allow business owners to identify outgoings and receipts more precisely when the information is still fresh in their memories than if less regular records are kept. For example, can you remember which customers you had lunch with last Friday?

Maintain Separate Bank Account For Your Business

Many business owners do not maintain a separate bank  account for their business and instead, use their personal bank account for their business. It is recommended that you open a separate account for your business to deposit all business-related receipts and issue cheques for business-related expenses from this account

Although it is not legally required for a sole-proprietor or partnership business to open a business bank account, doing so will provide the following important benefits:


  • It will be easier for you to keep track of your business income and expenses
  • Your business account will clearly separate your business from personal finances which will be very useful in the event of a tax audit by the Inland Revenue Board.
  • By maintaining separate account for your business, you will demonstrate to the Inland Revenue Board that you have a systematic approach to your business and will make your claims for business deductions through this business account appear more legitimate and credible.

Maintain A Separate Credit Card

Another method to provide better tracking and recording of your business expenses is to maintain a credit card solely for your business purposes only. By doing so, you will avoid the hassle of having to separate business-related expenses from your each and every credit card statement. Although the monthly credit card statement is also considered proof of payment, you will still need to keep the original invoice and credit card charge slips as evidence as well. Simply jot down the business purpose of a particular purchase at the back of the invoice or charge slip and with other relevant information.

File Documents Under Proper Headings

Supporting documents are a base for small business record keeping. Such documents include invoices, receipts, sales slips and paid bills. Keep your supporting material in a systematic manner, perhaps organised into categories stating the purpose the expense was incurred for, eg. travelling, staff entertainment, client entertainment, etc.

Different Businesses

If you own more than one small business, keep separate records for each business so that you can monitor the performance of your businesses individually.

About Richard

Richard Oon Hock Chye has more than 25 years of experience in taxation and business advice, with particular expertise in Malaysian property law. He began his taxation career with Deloitte Touche Tohmatsu, a ‛Big Four’ accounting firm, before starting his own practice, ConsulNet Tax Services Sdn. Bhd., in 1996. He is currently the National Tax Director of TY Teoh International, one of the leading consulting service providers in Malaysia. It is a member of the MSI Global Alliance, a global network of more than 250 independent legal and accounting firms, in over 100 countries. Richard sits on the board of two companies listed on the Main Board of Bursa Malaysia, as an independent non-executive director. He is also a regular contributor to several magazines and publications, and has shared his tax expertise on numerous occasions with organisations and property developers. As well as being a member of the Malaysian Institute of Accountants (MIA), Richard is a fellow member of both the Association of Chartered Certified Accountants (ACCA) and the Chartered Tax Institute of Malaysia (CTIM). He is a Certified Financial Planner (CFP) and holds a tax agent licence issued by the Ministry of Finance. Richard is also the author of the book, ‘Every Property Investor’s Guide To How To Pay Less Tax Legally’.

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