Paperwork etc

You must keep a record of all money going into and out of your business. HMRC requires this for taxation but as I keep saying, this info is incredibly useful to you anyway. Indeed, it is essential to the smooth running of your business. Doing this accurately and often will enable you to create a precise snapshot of your business finances at anytime.

What to record

You must, at a minimum, keep the following records:

Money coming in

  • Sales of products/services
  • Sales of business assets
  • Capital introduced including money paid into the business from personal funds

Money going out

  • Purchases of stock
  • Cost of goods sold
  • Overheads (ie business expenses incurred)
  • Purchases of business assets
  • Drawings ie money taken out of the business for personal use

What pieces of paper to keep

To support the above records keep the following:

  • Bank statements
  • Paying-in slips
  • Cheque book stubs
  • Till rolls
  • Invoices for the sales you’ve made
  • Invoices for stock purchases
  • Invoices for cost of goods sold
  • Invoices for business expenses incurred
  • Documents supporting sale/purchase of assets
  • Documents supporting drawings/capital introduced

When can I throw this stuff out?

You need to keep all paperwork for five years from 31/3 following the tax year to which they are pertinent. You can be fined pretty heavily if you don’t so keep them for six years to be safe.

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