When you are running a business, your finances should be at the very heart of all that you are doing. Look after them properly and it is much more likely that you are going to run a company smoothly and with as few bumps in the road as possible. This is also vital from a compliance point of view.
If your business gets investigated by the tax authority, you don’t want to end up in a situation where you are scrabbling around trying to put together documents that could have easily been found and accessed. With this in mind, here are a few top tips that can help out with your financial record keeping, ensuring that it is in as good a place as possible.
Make sure to keep detailed records
First of all, you need to look closely at the level of detail of what you need to be keeping in the first place. You don’t want to end up in a situation where you are not storing what you need to. There are a number of key areas that you should be looking into. First of all, the sales and other income from your business. This may seem obvious but it is an important starting point. Secondly, you should consider all of the business outgoings as well. You then may have a series of tax-exempt goods and services which should fall under another category entirely. Finally, you have all the details of business travel expenses. Once you have thought about keeping all these records, you then need to have a place to store them.
Ensure you keep them for long enough
The amount of time that you need to keep your records will vary, but in the UK if you are self-employed, you will need to keep hold of them for five years. This way, you can refer back to them if needed at some point in the future if they are requested. You don’t want to end up in a situation where you are empty-handed when these important record keeping files are requested as you end up in a tax audit or similar situation.
Store the records digitally
We certainly live in a digital age, which is why it is so important that your tax records are going to be stored in exactly the same way. Many businesses are still working in an old fashioned paper way, which is why you need to make sure that you are automating as much as possible. Not only will this mean you have everything in one place, but you should be able to access it all easier as well. For this reason, it is more than worth looking into MTD software or something similar. This will help your business to run much more smoothly.
There you have just a few of the main ways that you have available to ensure that your business keeps on top of your financial record keeping. The better you do this, the more likely it is everything will run smoothly.
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