While Tax law does not require businesses to maintain books and records in any particular way. It does require them to keep accurate and complete set of books. Businesses are also required to keep supporting evidence for those records (i.e. receipts, statements, etc.). Personal notes and hand written memos on your day planner are not sufficient (and may be disallowed) for accurate record keeping.
SOMEONE HAS TO PAY
All too often accountants hear their clients say, “I’m not keeping good records cause I going to make the IRS dig for it all”. They will not dig. Due to the costs of an audit, the auditor is expected to find something to “pay” for the audit.
GUILTY UNTIL PROVEN INNOCENT
No receipts mean no deductions, which increases income that results in more taxes, penalties and interest. Don't think that the IRS will have to "prove" that you have done something that doesn't agree with the tax law - the burden of proof is always on the business owner, not the IRS (guilty until proven innocent in this case).
If you are not devoting the average ten hours a week to accurate bookkeeping, now may be the time to hire someone to keep your records straight. Quality Accounting Solutions has effective bookkeeping and accounting services to help you with all of your business needs.