How to keep business Records

If you’re Self Employed you need to keep records of your income and expenses. There are, though, no rules on how to keep business records. So the choice is yours. But they must be accurate, complete and readable. And HMRC can charge a penalty if they’re not.

So what are the options?

How to keep business records

You can keep them any way you like but the main options are to keep them:

on paper;
digitally, or;
as part of a software program, such as bookkeeping software.

Let’s look at these options in more detail.

Keep paper records

This is fine in principle but there are a few downsides.

Firstly, you don’t always get paper records. Many receipts or invoices today are sent digitally. And with purchasing online on the increase this is becoming the norm.

Secondly, storage. You have to keep them somewhere and they can take up a lot of room. Extra storage space comes at an extra financial cost. Whether it’s an additional filing cabinet or off site storage facilities.

Thirdly, protection. Yes, really! There are plenty of instances of flood or fire damage to properties and businesses are not immune. If this happens there’s a good chance paper records will be the first things lost.

Keep digital records

This is the alternative to keeping paper records. There are a number of options but also some caveats. You can store digital records:

On your email software
On an online supplier account
On a PC
On the cloud
On a hard drive
On bookkeeping software

Let’s have look at those options in more detail

Those records that you get via email could be stored in a folder in your email program for example and those that are on supplier accounts (eg Amazon) should be retrievable from there.

For those where the above doesn’t apply it may be worth scanning or snapping and saving to bookkeeping software (if you have it) a local hard drive or on the cloud.

Always, ALWAYS make sure data stored on a hard drive is backed up. Preferably onto a portable hard drive or the cloud.

My Advice on how to keep business Records

You can’t avoid keeping records. And there may be a lot of them. Keeping them digitally has a number of benefits. Not least saving on physical storage space.

But be sure to back them up if that’s your choice of how to keep business records. You will need access to them for years to come. And you don’t want to lose that because of a corrupted hard drive or worse.

The best advice I can give is that which I’ve heard time and again from many IT experts:

You can never have too many backups.

You may have 1 set of records in your bookkeeping software but If something happened to that data you may need to get copies from somewhere else in the event of an HMRC inspection.

A good solution would be to:

store copies in ALL of the places mentioned above
run regular back ups using more than 1 external hard drive
store at least 1 external hard drive in a separate but safe location

Help with how to keep business records

Or just email us if you want our:

New Business Start-up Checklist, or;
Business Plan Template, or;
Help with
- Bookkeeping
- Software
- Accounts
- Taxes

Achieving Success with your business

If you’re just starting your new business venture or struggling with the steps to the next level contact us now.

We can help you with this and much more

Get ready for success with Moore Financial Management

We can help you with all of your compliance obligations such as:

Self Assessment Tax
Making Tax Digital
Corporation Tax
Filing Accounts
VAT
Payroll and Pensions

But also the things you really need to increase the chances of your business being a success

Management Accounts
Cashflow Reporting & Forecasting
Budgets
Real Time up to the minute information

These are the things that add value and the information you need in order to make the correct business decisions

If you’re not confident with any of this or don’t have the time, getting a licensed accountant to do it for you can actually save you money. It can free up your valuable time which you can use to concentrate on your business. You can also benefit by knowing it has been done correctly and on time.

Mistakes can be costly.

As can missing deadlines.