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Keeping Records

Keeping records of your financial transactions is helpful for managing your money. You can always refer to the recorded information to check past transactions as well as to inform future planning.

 

What are some other reasons to keep financial records?

  • Good records provide the financial information you can use to operate more efficiently and increase your profitability.
  • Accurate and complete records enable you to identify all your business assets, liabilities, income and expenses. This information helps you pinpoint both the strong and weak aspects and phases of your business operations.
  • Good records provide the specific amounts of past expenses that will help you develop a budget for the future.
  • If you operate a business, good records will help you prepare current financial statements, such as the income statement (profit and loss) and cash-flow projection. These statements, in turn, are critical for maintaining good relations with your banker. If you plan to ask for a loan, your banker is likely to ask for these records in order to get a financial picture of your business.

Some documents or records commonly used in Pakistan and the information they provide are below:

Financial Documents

Information Provided

Budget

Projected income and allocation to different expenditures

Loan agreements

Amount of loan, duration, installment amounts and due dates

Savings passbook

Amount and date of savings withdrawals and deposits

Bank Statement

Deposits, withdrawals, interest earnings, fees on bank accounts

Insurance Agreement

Insurance payments, premiums, coverage terms and conditions including procedure of how to claim

 

Some tips on how to maintain financial records:

  • Keep budgets and cash-flow tracking records in a notebook
  • Have envelopes, files, boxes or plastic bags to separate and keep receipts, passbooks, loan documents, insurance forms, etc.
  • Keep records where they are least subject to fire, floods, theft and other hazards
  • Keep copies of all important documents in a safe box or with someone you trust. You will arrange your files in a way that works best for you. You may also decide to keep copies of the documents at home and place the originals in another place, like a bank safe deposit box.