The importance of keeping accurate business records cannot be overstated. Forgetting about HMRC for a moment, it is extremely difficult to know how your business is doing without good record keeping. Knowing whether you can invest for growth or if you’re paying a supplier too much all comes down to the records you keep.

There is no right system to use when it comes to your business; you have to find the one that works for you. This could be a computerised system like Sage, a box under the bed where all of your invoices go, or a million and one ways in between. As long as the system you use is accurate and complete, then no-one can complain, it’s when you do nothing that you ultimately end up losing.

Legally, the minimum records you are required to keep are:

  • Details of income, including invoices, credit notes, till rolls etc.
  • Details of expenses, including invoices, credit notes, statements and remittances etc.
  • Bank and credit card statements
  • Loan and hire purchase agreements
  • VAT returns
  • Wages records
  • And any other records use to run your business, eg. appointment diaries

Obviously, the main issue here is tax. You can’t be sure you are paying the correct amount of tax if your records aren’t correct and this is where HM Revenue & Customs may step in. Under an enquiry, HMRC would expect you to supply records that back up the figures declared in your accounts and tax returns and failure to do so can result in significant penalties. So why risk it?

Please speak to us for advice on setting up a system that’s right for you.