Records to keep
What records Do I Need to keep?
Whatever your business type you MUST keep accurate records and this means keeping a record of everything the business buys and sells.
There are a few basic record keeping rules which you must follow:
Rule 1 : Always get a receipt for every item of expense.
No receipt = no deduction
On invoices, mark on the invoice;
- How the invoice was paid, i.e. by cheque number 005
& the date the invoice was paid
Rule 2 : Always raise a duplicate sales invoice for sales or money
received and mark on the sales invoice;
- How the invoice has been paid i.e. cash, cheque etc
& the date the payment was received / banked.
Rule 3 : Always keep the items from rules one and two. File them in a
organised way that suits you and your business.
You need to keep self employment records for five years and limited company or partnership records for six years after the latest date your tax return is due.
What expenses can I claim when working from home? This link provides a useful article
The Cash Book
Get an A4 (or larger) lined blank book.
You may need up to 5 separate sections within your cash book
Petty Cash Expenditure
Petty Cash Income
Credit card Expenditure
For each section make some columns. (or if you are computer literate set up an excel spreadsheet) Use the headings: Date, Description of the purchase or income, reference, pay reference, net amount, VAT, gross amount.
In the Banked Income section of your cash book list out all your income received that month.
In the Banked Expenditure section of your cash book list out all your expenditure. Use the columns to analyse out your main different types of expenses / incomes. For example if you are a manufacturer your main type of expenses will probably materials, tools, motor expenses, fuel, drawings etc ... At the end of each month underline the last entry and tot up all the totals.
You now know exactly how much income you had and how much expenditure you had in the month and can see at a glance if you have made or lost money that month.
Keep a list of all your sales and other income;
Keep a list of all your expenditure relating to your business;
Keep a cash book for items paid or reeceived through the bank account - see below
Keep a separate list for petty cash expenditure (if relevant);
Keep Bank statements and correspondence from HMRC;
Keep a record of goods taken for personal use and payments made to the business for these;
Keep a record of all business and private miles travelled and keep all your petrol receipts;
If you hold stock, keep stock records and carry out regular stock takes.
If you are VAT registered, make sure that when you make purchases of goods or services that you get a VAT receipt and the VAT receipt is invoiced to the name on the VAT registration certificate.
Mrs Judith Wilson
JAWs Accountancy Services Ltd
Phone: 01530 412658
Mobile: 07866 223059
Packington, Ashby De La Zouch
9.00 a.m. to 3.30 p.m.
Monday to Friday
JAWs Accountancy is an Accountancy practice based in Packington, Ashby-De-La-Zouch. We offer Accounting services to small businesses and companies in Ashby and surrounds.