Advantages of Keeping Good Business Records
All business owners are trying to avoid legal problems before they start. So what are the best strategies for staying in business and out of costly litigation?
As it turns out, maintaining extensive and accurate records of your business is one of the easiest and most effective ways to keep your company out of legal hot water. Here are a few reasons keeping good business records is a great idea.
Employee Expectations and Rewards
Having clear policies in place regarding employee work goals and behavior can set your team on the right path and make sure your entire staff is on the same page. Especially if an incoming employee is replacing a departed staff member, having records of what was expected of a person in that position and how the previous employee performed can ease the transition.
Comprehensive discrimination and sexual harassment policies can also foster a healthy and productive work environment. And keep accurate records of any incidents can help in eliminating future violations and aid in defending any future litigation.
Additionally, when it comes time to evaluate employee performance, thorough records of his or her ability and production will define the kind and amount of any bonuses and raises, as well as whether corrective measures need to be taken.
Money Money Money
Improper record keeping can affect everything from day-to-day business and contracting to your year-end tax filings. Obviously you want accurate records of income and expenses so you can properly file your taxes and avoid an IRS audit.
But good business records, especially about your incorporation and legal structure, can help you raise money and apply for business loans, simplify the process of executing contracts for goods and services, and, most importantly, guarantee that your company is adhering to any and all business laws and regulations.
And, if any litigation should arise, accurate and comprehensive business records will help defend your company's legal claims. Keep good business records and you'll keep your business on the right track.
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Related Resources:
- Is 'Corporate Records Service' a Scam? What Businesses Need to Know (FindLaw's Free Enterprise)
- You Should Download FindLaw's Free Guide to Hiring (FindLaw
- Taxes: The Importance of Record-Keeping (FindLaw)
- Top 5 Last-Minute Tax Tips for Businesses (FindLaw's Free Enterprise)
