How to Keep Your Business Records in Order

Running a business comes with many moving parts, and keeping accurate records is one of the most important. Whether you’re a sole trader, a partnership, or a limited company, staying on top of your bookkeeping is essential for understanding your finances and staying compliant with HMRC. At Vaughan Chartered Accountants, we understand that this can feel like a daunting task, so we’re here to guide you through it and make it easier.

What Records Do You Need to Keep?

To keep your business running smoothly (and stay on the right side of HMRC), here’s what you’ll need to track:

• Sales and Income: This includes every penny your business earns, from client payments to online sales.

• Business Expenses: Keep receipts and records for anything you spend on your business, from rent to stationery.

• VAT Records: If you’re VAT-registered, these are crucial for filing accurate VAT returns.

• PAYE Records: Employing staff? You’ll need to keep detailed payroll records.

• Personal Income: It’s important to track how much you earn outside of your business too.

Also keep an eye and make sure you record:

• Money you’re owed but haven’t received yet (e.g., unpaid invoices)

• Expenses you’ve committed to but haven’t paid for yet

• The value of any stock or work in progress at the end of your accounting period

• Your year-end bank balances

• How much money you’ve invested in the business

• Any withdrawals you’ve made for personal use

Why Is Record Keeping So Important?

Even though you don’t need to send these records to HMRC when you file your tax return, you’ll need them to:

1. Accurately calculate your profit or loss for the year.

2. Provide evidence if HMRC requests to see your accounts.

At Vaughan Chartered Accountants, we can help you set up simple and effective systems to manage your records. Whether it’s cloud-based solutions like Xero or old-school spreadsheets, we’ll tailor a process that works for you. With accurate records, you’ll not only save yourself a headache at tax time but also gain a clear understanding of your business’s financial health.