Record keeping is a vital part of running a business. If you don’t keep accurate up-to-date records it can lead to mistakes, wasted time, loss of revenue, loss of customers, financial penalty, and worst case scenario, the loss of your business.
Generally, the HMRC recommend that you keep records relating to tax for a minimum of six years. However industry specific regulations may require you to keep your records for longer. Self-employed people and partnerships must keep a record of all sales and takings (e.g. till rolls, sales invoices, payslips etc.). They must also keep a tally of all purchases and expenses (e.g. receipts, accounting records, mileage records etc.). VAT registered businesses must keep further records of VAT related sales and purchase invoices, and information relating to import or export activity.
To calculate corporation tax, limited companies must keep even more records such as accounting records (assets, liabilities etc), plus formal business records such as bank statements, paying-in slips etc. Limited companies need to be able to show HMRC their financial information at any time, so these records must be not only kept but easily accessible.
Employing staff creates a whole new raft of record keeping responsibility. In order to accurately pay PAYE and NICs a record must be kept of all payments made to employees, including details of benefits, expenses and any statutory payments.
And those are just the records required for tax purposes! Running a business from home, however simple, generates paperwork. For example, the Health & Safety Executive require a whole realm of records – risk assessments, safe method of work statements, accident book, to name but a few. If you run any kind of vehicle or fleet as part of your business you will have all the paperwork that accompanies that: service records, MOT certificates, VED discs, etc. And then of course the day-to-day actual running of your business requires a certain amount of paperwork: order forms, letters, invoices, marketing paraphernalia, stock inventories, insurance…
If your business runs from your kitchen table, storing all these business records as well as your stock can become a problem! Here are a few ideas to help you simplify your record keeping and storage:
- Apps: the HMRC recommend various apps that help your small business keep accurate records. These apps help you keep records on the go so that the end of the tax year does not send you delving into huge boxes of receipts!
- Electronic records: most records can be scanned and saved electronically. However you must ensure that you scan the front and back of the document and then keep it somewhere accessible.
- Cloud storage: rather than clog up your PC memory with endless scanned receipts and insurance documents, ensure their safety and ease accessibility by using cloud storage. There is free cloud storage available but if you require a large amount then prices start from around 5p/GB which is negligible really if you consider the time and risk factor of backing up all your own data held on PC.
- Business storage: there are some records or items that just cannot be held electronically. From stock to business records, companies like Flight Store supply clean and secure storage, plus a distribution service to further simplify your storage needs.
Keeping all stock in your home office may not be an option!
Good record keeping and efficient use of storage options can actually save you money and hassle in the long term. Utilising services such as cloud storage or a storage and distribution partner can improve productivity, speed up service and enhance customer satisfaction. Improved customer service leads to increased repeat business which will in turn reflect well on your company’s bottom line.
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