What Are Good Accounting Practices?
• Keep Your Accounts In Good Order • All businesses should keep proper records and accounts for at least 7 years. Records you should keep include receipts for purchases, invoices, payment vouchers, bank statements, bills and copy of receipts for payment received • Keeping your accounts in good order will also help you to apply for loans and attract private investors. • Fix Your Accounting Period Each year, you pay taxes for the previous year’s income earned during the accounting period. • Sole-Proprietors, Partnerships & Companies • To keep things simple, most sole-proprietors and partnerships choose the calendar year as their accounting year. • Businesses (sole-proprietors, partnerships and companies) sometimes opt to end their accounting period after 31 December. By doing so, they have a little more time to settle their taxes. • To illustrate, let’s consider two businesses with different accounting periods: • XYZ’s accounting period is 1 January 2004 to 31 December 2004. The Year of
