Maintaining proper accounting records is vital in terms of monitoring how well your business is doing. Ensuring you are paying the correct amount of tax is a legal requirement when trading as a limited company or some other legal entities.
A good financial accounts system will include receipts, payments, invoices, bank statements, till receipts (where applicable) all of which should be kept in a tidy manner with a cashbook and daybooks maintained.
Many software packages are available to help maintain the company’s financial records. The system you choose does not have to be a software package and many business owners use excel spreadsheets or even manual records. Your choice will depend how much information you want to obtain from your records and we are happy to help you make the right choice.
A good financial system will be able to tell you how profitable your business is and easily track monies owed to you or the liabilities you are due to pay.
For VAT purposes, accounting records should be prepared in order that VAT returns may be completed.
A good practice is to complete a regular bank reconciliation, so you are aware of cheques issued or credits received that have not yet been banked, resulting in a true bank balance.
A good financial system with accurate accounts will always save you money, as there is then less corrective work by your accountant.
After your financial year end, returns will be required and accurate tax calculations made. You should seek the support of an accountant if you are not qualified in this area.
Records should be maintained for a period of 6 years after the year end has passed.
KEY CONSIDERATIONS #
- Day book (ins & outs)
- Sales invoice template
- Sale invoice file
- Purchase invoice file
- Bank statement file
- Petty cash book
- Credit card management
- Asset register
- VAT returns
- Other records personal to your business
Software packages are available to help maintain the company’s financial records.