All businesses benefit from a robust record keeping procedure. It is important to keep financial and accounting records in order to remain in compliance with relevant legislation and to be able to produce documents when requested by HMRC. But some records need to be kept for longer than others. Here are some of the essential types of records you need to file in order to run your business efficiently.
It is important to remember that every business is different, so there will be differences in which records you need to keep and for how long. If you have concerns or you want to know more, make sure you consult one of the accountants glasgow offers in order to correctly organise your record-keeping.
When it comes to keeping records for tax purposes you need to hold them for at least five years, and in many cases you need to do so for longer. For tax purposes, you need to keep the documents which are relevant to money spent and received in the course of your business dealings. Examples of such documents include invoices, cheques, credit card receipts, documents relating to expenses, and all documents relating to cash and banking matters.
Records for VAT should be retained for six years and these include documents for VAT accounts as well as your annual accounts for business, order notes, delivery notes, account books, purchase invoices and sales copy invoices, bank statements, and import and export notes.
You need to keep the records you use for your annual accounts for two to three years. You need to keep annual accounts that were audited forever.
Staff and Wages Records
Other types of documents that you need on file relate to your wage bill, including P45s, pay details, payroll, and records of national insurance. Every member of staff should have their own confidential file that will include personal details, their application form, their financial details such as national insurance number, as well as payment details and any information regarding holidays and sickness pay.
It is also a good idea to keep records for your own purposes and not necessarily for the tax authorities, such as enquiries, correspondence with clients, contracts, and old orders. This will help you when you start new business or restart with an old client.