By PaperRocket Accounting, Oct 14 2020 02:04PM
When you have your own business, of course, your main priority is going to be its day to day running, and doing everything you can to make it a success. In turn, this can mean that other obligations can get neglected and come self assessment or company accounts filing time, you are running around like a headless chicken trying to get everything together.
Well, in this blog, we break down our top tips to help you stay on top of your accounting records so sifting through shoeboxes of receipts becomes a thing of the past!
• Make sure you’re keeping records for the right amount of time
HMRC guidelines state that you need to keep all business records (invoices, bank statements and, notably, all receipts) for a minimum of 6 years. If HMRC decided to investigate your company and you didn’t have the corresponding receipts for expenses claimed, they may well disallow them, forcing you to pay the tax difference. Scanned copies of these records are fine.
It is also worth keeping a copy of any documentation relating to your company, especially anything received from HMRC and Companies House. If you have an accountant, you should always scan a copy of any official correspondence received so they can check if anything needs actioning.
Whether you have a business bank account (a requirement for limited companies but optional for sole traders) or use your personal account for any sole trader work, if you opt for paperless statements, you should ensure that you are still downloading statements (PDF format) periodically and keeping hold of these for the minimum of 6 years (but ideally indefinitely).
• Say goodbye to the spreadsheet and use a specific bookkeeping software.
Gone are the days when the only way of keeping records was in an old school spreadsheet, reliant on hundreds of formulae that could go catastrophically wrong with one erroneous input. Now, whether you have a limited company, or are working as a sole trader, you would be wise to use a cloud accounting software to keep track of your business.
Here at PaperRocket, we use the award winning FreeAgent as our accounting software provider. With FreeAgent, you can generate invoices, sync up your bank feed, log business mileage, and upload any expense receipts (including on the go, with their handy app). A great accounting software (like FreeAgent) will also give you insights such as estimated corporation tax and profit (based on the information input) so this means that at any point in time, you can login and check how your business is doing.
• Whatever you do, don’t leave your bookkeeping until the last minute!
If you take anything away from this blog today, let it be this… don’t leave your bookkeeping until the last minute! There is nothing worse than, at the end of your company year or come self assessment filing deadline, when it is time to prepare the accounts/tax return, spending hours rifling through a shoebox full of receipts and invoices, trying to decipher what everything is and how it needs to be included. If you can set aside just an hour a week to maintain your accounting records, trust us, when it comes to preparing your company accounts, ‘future you’ will appreciate it!
PaperRocket Accounting provide accounting and tax services to professional contractors and freelancers working in the UK.
We offer our clients a flexible choice of fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.
Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.
We pride ourselves on our client satisfaction and customer service and were awarded 'Welwyn Hatfield Business of the Year 2019' in the SME Hertfordshire awards. We were also runners up and 'Highly Commended' for 'Best Contractor Accountant 2019' in The Contracting Awards, 'Small Practice of the Year 2016' in the AccountingWEB practice excellence awards, as well as FSB Hertfordshire Service Excellence finalists in 2015 and 2016.
To find out how we can help you please get in touch now.