Maintaining business records may seem like a daunting task, especially to the owner of a new company. However, accurate and timely record keeping will provide up-to-the-minute financial details and prevent any penalties being issued by HM Revenue & Customs (HMRC). Record keeping is even more important now, as HMRC is likely to conduct a spot check at any time, which may result in a penalty being charged if the books are not up to date and accurate.
Start at the beginning
When you start a new business venture, begin the record keeping process so that you know from the beginning about your income and expenditure. Letting it slide just for a few weeks may not seem to be a major issue, but not knowing how much cash is available at any time could have a serious impact on financial decisions. As you can claim back many of the expenses when setting up a company, it is vital to maintain a record of all those incurred and retain receipts.
Make a note of when all documents are due to be filed with HMRC and Companies House, as missing the deadlines will incur penalties. Record the due dates for payments too, as these must be paid on time.
Create a system
An accounting system is crucial for any company, so that you have all the business financial details recorded accurately in real time. This will provide accurate data upon which to base any financial decisions, and can prevent costly mistakes being made. If you are considering an accountancy outsourcing service, consult with them first as you may be able to access a system that is compatible with theirs, reducing your fees.
Attend a workshop
Keeping business records may be something that you, as a business owner, have never tackled before. Although the process is primarily to keep a record of income and expenditure, the data can be used for so much more. Cash flow is one of the most important aspects of the company and accurate record keeping will ensure that you stay in credit or even highlight any potentially weak areas, so you can act before any major catastrophes occur. HMRC provides workshops that are free of charge. Attend as many as you feel you need, so that you can maintain accuracy.
Budget
As you keep accurate and timely business records, you should also budget for payment of tax so that you don’t miss the deadline.
For any further information on record keeping, contact us today.