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As a sole proprietor in the U.S., is there a good reason to keep copies of the invoices issued to my clients?

I do not personally benefit from invoices after they are paid. But is there any situation, perhaps in an IRS audit, where I would need to prove the validity of income by providing invoices?

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It's always beneficial to have detailed business records.

There are any number of reasons where you'd need to prove both the types of services you've rendered and the payment history - you've already noted audits (for IRS taxes).

Other possibilities:

  • Lawsuits
  • Audits by local/state tax authorities
  • Proof of income to for loans
  • Proof of income for sale of your business (to prove client base, income streams, etc.)
  • Business audits
  • Leases (example: some business leases include a charge for percentage of sales)

Whether these records need to be original or electronic might be the topic for another question.

  • Good points. I was under the impression that bank statements would reveal deposits, but that doesn't necessarily prove it as income. – user59742 Oct 21 '17 at 16:54

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