As a self-employed individual, maintaining good books and records is one of the most essential tasks to achieve long term success. The process of maintaining books and records is an on-going process. Your records should be complete and reflect all your self-employed or business activities, regardless of how frequently the activities occur.
Maintain a daily log
It’s a good idea to keep daily records of all your business transactions. We provide a sample log at the end of this module to help you, but you can also search online or buy a software program to keep track of your business transactions.
Be sure to:
- list detailed information about each transaction; and
- update your records every time you
- make a sale or get paid,
- make a purchase, or
- pay an expense.
To support your accounting, it’s important that you document (log) your activity as soon as it occurs. Save all records of your transactions for a minimum of three (3) years.
Your records should contain enough information to correctly determine:
- income earned—the amount you received as payment, regardless of how you were paid (whether by cash, check, money order, credit card, or any other method); and
- expenses paid each time you did anything related to your self-employed or business activity.