Though it has been said many times that it is very important to keep a complete set of books for a business either for business tax reporting or business management purposes, many businessmen and businesswomen have deliberately ignored it until they are forced to do so.

Why is it so important to maintain complete books for our businesses? The following are some of the benefits and reasons.

i) Submission of annual tax return - Every business whether it is big or small is required to compute and submit tax return on an annual basis. In order to be able to do so, a business has to keep a complete set of books. If you keep your books up to date using the correct bookkeeping methods, you can also plan for your business taxation on a timely manner.

ii) Financing application and source of funds for business expansion - If your business is expanding and you need to source for outsiders' funds, then having an up to date financial statements is truly important. For potential investors and funds lenders, they would want to perform their due diligence and assess your business performance and profitability before they will agree to lend you money or invest in your company.

The above are only two of the most common benefits and reasons that why we need to maintain an up to date financial records. Other significant reasons include business management, cash flows management as well as budget preparation which is normally a useful tool to set goals for a business.