Good Bookkeeping Records
If you have been in business for any time at all no doubt someone will already have advised you to keep your bookkeeping records up to date. Why? This blog aims to clarify some of the main points.
Here are some of the benefits and reasons:
- It makes it easier to complete your vat/tax returns
- It enables you to make timely business decisions
- It helps you to find past information more quickly
- It helps you to keep track of your expenses
- It enables you to see quickly what you are owed and what you owe others
- It saves time
- You will avoid paying any extra tax or penalties (late filing/poor record keeping)
- You will be able to request a bank loan or credit if necessary
- It will save on accountancy costs
What do I need to get going?
Good bookkeeping is definitely not rocket science! You just need:
- A system
- Regular inputting of data into that system
Depending on the size of your business, an effective system can range from a simple spreadsheet to an internet-based software package such as Kashflow or Zero. Deciding what is right for you and your business is likely to depend upon the number of transactions to be recorded daily/weekly/monthly, the amount of time you have and your level of computer-literacy. One of the key benefits of software packages, however, is that both you and your accountant can have access to the live data. This means that help is available to resolve queries, review performance and offer advice – all remotely from the live data on screen.
What records do I need to keep?
Once the system is in place then regular data inputting is the key. You will need:
Bank/Credit Card Statements
VAT Sales and Purchase Invoices (if relevant)
Construction Industry Scheme (CIS) statements
How long do I have to keep records for?
Businesses should keep records for a minimum of six years. However if you employ people, you need to keep PAYE records for three years (in addition to the current year). If you are a CIS contractor, you also need to keep CIS records for three years.