This newsletter series will give you insights and techniques to help you build a better business no matter how large or small yours is. I always say that success comes from working on your business as opposed to in your business. I want to share with you the systems and philosophies that have been successful for me over the years.

This is newsletter #19 in the series. If you have missed prior newsletters, and are enjoying the series, we encourage you to purchase the program. More information can be found by clicking on the coupon at the bottom of this page.

Your bookkeeping system and the specific records it maintains will often be established for the primary purpose of paying taxes and complying with governmental mandates, none of which are intended to help you manage your business for profit.

Among the many records to be maintained are time cards, proposals, estimates, job-costing analyses, contracts, permits, tax records, payroll records, inventory, tool locations, and truck costs. Some of your records are required to be maintained for specific periods by various governmental agencies, such as the IRS. Your CPA can provide you with a listing of records and their retention periods.

You can keep records with a physical filing system but you can eliminate much of the paperwork by using electronic filing. Don’t spend unnecessary time scanning documents just for the sake of keeping them on your computer, but when you have communication by email with documents attached, you should store those on the computer. Be sure to create a directory and file structure for the folders so that others in your office know where to find them. In some instances, you just might find it more effective to keep all your paperwork in the filing cabinets, filed by project.

Your accounting system must be constructed to provide not only tax and mandated data, but financial management data as well. Remember, you’re not in business to pay taxes—you pay taxes because you’re in business! You’re going to be required to pay some taxes whether you make money or not.

You’re in business to make a profit, not to pay taxes. Learn the difference between a bookkeeper, a CPA, a tax advisor, and a tax attorney. Learn the difference between tax evasion and tax avoidance. One is legal—the other is not! Tax avoidance is professional management in action!

Vehicle records should include operating and maintenance and repair costs. You can make accurate decisions about replacing vehicles only when the cost of operating an older vehicle (including maintenance) exceeds the cost of payments or leasing on a new vehicle. A factor that contractors many times fail to include in determining vehicle costs, is the lost time for labor when they're unavailable due to repairs or service.

The above content is extracted from Mike Holt's Business Management Skills Program.