There are a number of benefits to be gained from keeping accurate and up-to-date business records. It saves you time, and therefore money, whenever you need to produce financial reports. You can be confident that you’re only paying the tax you owe. It also helps you keep up to date with how much you owe to suppliers and how much you are owed by customers.
1. Get a system in place
Spend time setting up a system which you stick to. Allocate a regular time every week or month to deal with your financial administration or make it a key responsibility for a trusted employee or manager. It is also advisable to file all receipts logically.
2. Separate your professional from your personal finances
It is best to treat the business as a separate person, from which you only take income in the form of wages, dividends and in claiming back business expenses against receipts.
3. Make security a priority
The fewer people involved in your record-keeping, the fewer the errors that are likely to creep in. It is a good idea to password-protect your company records and only divulge the password to those that need it.
4. Safely store hardcopies of your records
Even if you choose to keep all your records electronically, it is vital that you keep a regular electronic back-up and a paper copy elsewhere. Store records that cannot be copied, such as chequebook stubs in a fireproof box.
Main benefit from keeping accurate records is it ensures you only pay the tax you owe and helps you keep an eye on your financial activities.