Keeping and recording business transactions is an essential part of being in business.
Keeping accurate records helps you to –
• Pay the correct amount of tax
• Keep track of your outgoings
• Keep track of debtors and creditors
• Save time and accountancy costs
• Ensure you are paid the right amount of benefits
If you don’t keep accurate records you can be fined by HMRC.
There is no law on how to keep a track of your income and expenses. All that is required is for them to be produced in readable format if required.
There are many methods of keeping track of your records.
Our main slice of advice here is – to do one method, thoroughly from start to finish. If you only partly complete your books and have missing transactions then this can be much more difficult to complete year end accounts from an accountant’s perspective.
Business records must be kept for 6 years.
Depending on the type of the business depends on which records you must keep. HMRC have produced a comprehensive table which shows this –
(Page 3 & 4)
We recommend that you keep your books in electronic format. This can be done in a variety of ways –
• Spreadsheet workbook such as Excel or Googledocs. This is the simplest way of keeping a record. We provide simple, two page templates for our customers which record income and expenditure.
• Offline bookkeeping software such as VT Transaction +. These types of systems are a good way of keeping track of who owes you money and who you owe money to. They are also better for calculating VAT, and if properly completed can significantly lower your accountancy fees.
• Online bookkeeping such as Clearbooks. This is an online version of the above. The main advantage of this is that it is store online and so accessible anywhere, anytime. Clearbooks even have a smartphone app which puts your books in the palm of your hand.
In all cases we advise on keeping a good back up schedule to ensure your books are always safe.