Record keeping – What you need to know – Part 2

Recording the books

If you read the first part of this blog, you should know how you are going to file everything which means you can now start thinking about how you are going to record everything. HMRC have not issued any guidance about how you should maintain your records. You have two choices here, you can use a simple spreadsheet or you can use bookkeeping software that is designed specifically for the purpose.

Often, for the small sole trader, using a simple spreadsheet is all that is required and many will find it easier and quicker to use, it is also cheaper than going out and paying for a desktop software package such as Sage or Quickbooks or the monthly subscription to cloud based software like Kashflow, Quickbooks or Xero to name a few. Most likely your accountant can give you guidance on setting up a spreadsheet that will work for both you and them. The same principal as before applies, keep it as simple as possible.

Recordkeeping – What you need to know – Part 1

What do you need to keep?

As a general rule of thumb, I tell all of my clients, keep ANY receipts that are business related, depending on your business that can include petrol, stamps, stationery, computer hardware and software, materials, professional fees or subscriptions you may have, mobile phone, I could go on and on. Don’t forget to print a receipt for the cost of even coming here or to any other networking event. You also need copies of all of your bank statements, credit card statements (if you use one for your business) and paypal account statements. (NB: when it comes to bank accounts etc, it is advisable to have a separate account for your business, HMRC like it and it will make your bookkeeping easier as well). Keep copies of all of your sales and any credits you may have issued.

My moto, if in doubt, hang on to it. If you have an accountant, then you could ask them if you need it or simply include it with the paperwork you send to them when it is time to do your accounts and they can help you to determine whether you need it or can claim it.