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How to become More Efficient with Your Business’ Records

Apart from being a legal obligation, being more efficient with your business’ records can benefit you as well. When you have immediate access to your business’ records, you can have an easier time preparing all your accounts at the end of the year, and you have a better idea of your business’ cash flow, among other things. This makes it less likely for you to have to pay fines or penalties as well. Here is your guide on how to be more efficient with your business’ records.

Know what you have to keep

All UK businesses need to submit a tax return to HM Revenue and Customs. But in order to do this correctly, you should know what records you need to keep. The most important records include your invoices and receipts. Keeping your invoices is important because these would show your income. Additionally, your invoices should include such information as the kind of product or service provided, the total amount that was paid, and other relevant information, such as the addresses of companies and their registration numbers. To make it easier on yourself, have your invoices numbered in sequence so you can immediately see if there is any gap or discrepancy.

How to become More Efficient with Your Business’ RecordsKeeping your receipts is important as well. You should keep all the receipts related to your business, such as travel expense receipts, working or client lunch receipts, receipts for business supplies, and so on. There are also certain expenses which you can claim, so it’s doubly important to keep whatever receipts you have that are related to these particular expenses.

Other important records include bank statements, salary books, and cash books. If you cannot show accurate records, HMRC can fine you as much as £3000. Your records should also be kept for six years (minimum), as HM Revenue and Customs may decide to make an audit of preceding years.

Keep personal and business records separate

Even if you have a small business, it is crucial to make a division between your personal records and business records. For one, you can open another bank account solely for your business’ funds and expenses. By doing this, you are less likely to become confused as to what money you can spend for your business and for your personal expenses. This can also give you a better idea of where your business stands when it comes to profits and savings.

All businesses are required to comply with taxes – and you can only do this properly if your records are in order. It also pays to know when you need help – don’t be afraid to seek assistance from financial experts such as the accountants central London from established firms like GSM & Co. if you are not entirely sure of what you should be doing. Getting the right help can go a long way in ensuring your peace of mind.

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