To be able to submit accurate financial data, for example in tax returns or during an audit, you need sufficiently fleshed out financial records; this both ensures accuracy, and helps protect you in the case that something were to go awry at some point in the future. In depth financial records can also help you better understand your business, so you can improve your margins and foster growth. They also mean that, should you visit our accountants in Southampton to enjoy any of the services listed across our website, we have the information we need to assist you effectively. For these reasons, in this blog post we take a brief look at keeping financial records.
First of all, what kind of records do our accountants recommend you keep?
Sales - Always record and keep information relating to sales and any other form of income. This might take the form of invoices, statements or receipts, either on paper or in a digital format e.g an email.
Purchases& Expenses - A great deal of expenditure can be written off when it comes to tax season, whether you submit your return yourself or call in our accountants in Southampton to optimise it on your behalf. But this relies on you keeping information relating to the purchase of office equipment and any relevant supplies, as well as your utility bills, which can in many cases be partially written off.
Business Account Transfers - Looking to withdraw or add funds to or from a business account? It’s important this is officially recorded to avoid it looking like a suspicious transaction. While you’re unlikely to be randomly audited, it pays to stay on the safe side!
Fuel& Travel Costs - Do you have to travel for business? Keep accurate records which state when, why and how you made the trip, how long the trip took, and where you ended up. Our accountants in Southampton urge you to keep a hold of any ticket stubs or petrol forecourt receipts as well, to support claiming back costs.
Another question we often receive from clients is how long should records be kept for? Obviously, if you enlist accountants they can keep records on your behalf indefinitely using sophisticated digital systems. But if you’re keeping them yourself, follow HMRC’s advice to at the very least store for 5 years after the next 31 January tax submission date. Southampton based businesses should also ensure their records are secure: it’s not uncommon for them to go missing during burglaries, for example. Consider investing in a safe and keeping the code secure; you can also back up digital records on a hard drive and keep this in a safe location.
