Keeping accurate and organized financial records is important for businesses for several reasons: (1) It prepares businesses for potential IRS audits by providing documentation to support tax returns. (2) It allows businesses to monitor their financial performance by creating financial statements to share with banks or creditors. (3) It ensures businesses have documentation to support expenses and income reported on tax returns. Businesses should organize their financial records by type (income, expenses, assets, payroll etc.) and retain them according to IRS guidelines, with some documents requiring permanent storage.