Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts, such as copies of all your invoices, bank deposit slips and possibly even photocopies of customer checks.
 

Purchases are the items you buy and resell to customers. If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should show the amount paid and indicate that it was for purchases.  Keep all supplier or wholesaler invoices and match them with your payments with the cancelled checks or bank statement showing the cleared check or electronic debit transaction.  Accurate calculation of cost of goods sold is a key step in preparing your business tax return.
 

Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should show the amount paid and indicate that it was for a business expense.  Keep all vendor invoices.
 

Assets are the property, such as machinery and furniture, that you own and use in your business. You must keep records to verify certain information about your business assets. You need accurate records for computing the annual depreciation and the gain or loss for any assets you sell.  Keep all purchase documents for assets and detailed documentation for major improvements to assets, such as building additions.