Though all my business records are now kept on Quickbooks - and I'm sure that is where an auditor would turn - we still keep all the paper receipts.
At minimum, if you're keeping records the old way with pencil and paper, you should keep track of the date, who you bought your items from, and the amount, and a general note of what it was. When I buy taxable items (patterns, tools, etc.) those are done as a completely separate transaction from items that I buy tax-exempt (such as thread, fabric, or anything that is either re-sold or is a component of a finished item).
I have had it happen where the IRS is auditing another business, and they have contacted me to provide totals of what I purchased from that other business during a particular time frame. Frankly I was annoyed with that request ...