why do small business owners save their clients invoices?what do they do with them?

What would happen if the taxman made a random /investigation? There is a legal requirement to keep business documents (I think for 7 years).

First of all, what do you mean by "client's invoices"? Recievables or payables? You keep your payable reciepts because those expenses are deductable and you need the documentation in case of an IRS audit. You keep the recievables to demonstrate that your income is legitimate, and also in case the clients get audited they can refer to you for documentation. Some is more or less important, but the paper trail is essential in business, though it could be digital, too. After 7 years you can throw them away, unless there is fraud.

All the expense invoices needs to be maintained as per the revenue service regulations

The period that it needs to be held is for seven years.

In case they audit you need the invoices as proof that you got the money from these clients

By last name?

Ask him - he might want to have it filed another way.

You need to take the bull by the horns and start making a spreadsheet.

Simple:

Name of customer: Last name and first initial.

Invoice number

Date

Amount

Hopefully someone there knows how to do sorting in a spreadsheet program.

I too am a small business employer individual. right here is how i might cope with it. If he could have been up front interior the initiating, i might have worked something out with him charging a provider value for each month it takes to gets a commission. He waited until you had to deliver him an approved letter. At his element he thinks which you need to wait for him to return up with the money. i'm not his business employer significant other and he would not deliver me further money whilst he's doing properly. I ought to ought to attend whilst he's not doing so properly. He agreed to pay you a undeniable volume for the centers you supplied. At this element, i don't care approximately conserving him as a customer as he will in all likelihood pull the comparable component next time. i might document in small claims court docket. in the experience that your bill has something approximately previous due rates on unpaid balances, i might incorporate the previous due rates besides.

Most small business owners save files because they were recommended to do so by a friend, family member, or sites like these. They are prepared the day when or if they need those papers. Within 5 to 20 years of business experience or when the stack of papers begin to look like the twin towers the small business owner than learns how unnecessary it actually is to do so. But as long as you work for him, whether he's right or wrong, he's right. So shhh... :)

EDIT: For example, the person who answered right before me.. Most beginners have that paranoia but it usually fades within 5 to 10 years.