One of the requirements for all businesses is that appropriate accounting records are kept for at least six years from the end of the accounting period in case of an inspection request from HMRC. Dependent upon the number of business transactions, there are various methods for keeping these records.
For very small businesses, manual records, such as a written or Excel cash book, may be sufficient. There should be separate sections showing a breakdown of the income and expenditure for the accounting period.
For businesses that have large volumes of transactions, however, the above method is likely to be impractical and time-consuming. This is where it may be useful to consider using one of the many computer-based accounting packages available. Currently, one of the most popular is Sage. This software allows users to input sales and purchase invoices, and to keep track of whether these have been paid. It also has an area for the preparation of VAT returns, which can then be submitted online.
There are various other packages available, including Quicken, QuickBooks and Farmplan. These can be purchased online and should be selected depending on the needs of the business and the preferences of the user. The packages include ‘Help’ sections to aid users.
A relatively new accounting package is Xero, which is an online package and shows information in real-time. Bank statements and invoices can be uploaded to update the system with the transactions that have taken place.
Green & Co are able to offer advice to business owners regarding the most appropriate method of keeping their accounting records, depending on the individual circumstances of their business. We are also able to provide training in the use of Sage, and offer a bookkeeping service for those businesses that would like to outsource this. For more information, please contact us on 01633 871122.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.