"Accounting for the Terrified"

From the Desk of the Bookkeeper Derby

Client Question: What sort of records do I need to keep?

The subject of record keeping is probably one of the greyest areas for anyone who has set up and is running their own business.  Their day is full enough trying to win contracts, dealing with clients/customers/members of the public that often times any thoughts towards setting up AND maintaining any sort of accurate detailed record keeping system is one of those AROUNTOIT jobs that keeps on getting pushed further and further down the line.

HMRC guidelines are amazingly and sweetly simple:

Basic records you must keep

You must keep records so that you can fill in the return fully and accurately.
Your basic business records must include:

• a record of all your sales and takings
• a record of all your purchases and expenses

You (or your book keeper) can then use these records to create a profit and loss account. It shows the sales income you've received and the expenses you've paid, and what profit/loss you've actually made.

But the key to any good (ie remarkably low) tax bill is the QUALITY of the records. 

Therein lies another painful decision - should the records be kept on a manual system or electronic?

If you've only just started out or are perhaps a year or so into your business then perhaps a manual system is a good starter for ten.  It is relatively cheap, around £15 and not only covers the ins and outs but has options to record telephone calls, mileage and other useful (to your bookkeeper) data that is perhaps not so obvious to the new-to-record-keeping-entrepreneur.

One of the easiest manual accounting systems for the Non-VAT Registered Small Business (and highly recommended to me by my mother-in-law) is the aptly named:

The Best Small Business Accounts Book (yellow Version): For a Non-VAT Registered Small Business ; This is ideal for those businesses with mostly cash sales.

There is also (equally recommended)  for the non-VAT small businesses with mostly invoiced sales also inspirationally entitled:

The Best Small Business Accounts Book (blue Version): For a Non-VAT Registered Small Business

Still find yourself  in the 'terrified' category?  Contact us here at Bookkeeper Derby - we may just be be able to help.


 BKD

Catch up with us later at Twitter:  @BookkeeperDerby