The Importance of Bookkeeping in a Business

If you run your own business, no matter what size, bookkeeping is a legal requirement by H M Revenue and Customs .

Basic evidence you must keep

Your programming language evidence will normally include:

a evidence of all your sales, with copies of any invoices you’ve issued

a evidence of all your business purchases and expenses

invoices for all your business purchases and expenses

details of any amounts you personally pay into or income from the business

copies of business bank statements

You or your accountant will use these evidence to create a profit and loss account - which shows the sales income you’ve received and the expenses you’ve paid, and what profit/ loss you’ve ctual made. Your tax liability will be based on this.

Other evidence you must keep

All businesses are antithetic and there are many specific types of elaborate evidence that may need to be kept. Some examples of evidence you should keep include:

cash book

petty cash book

order personal letter and invoices

copy sales invoices

details of any other business income received

details of any private money brought into the business

till rolls or other form of electronic evidence of sales

details of any other income

any cash taken out of the till to pay body part business expenses

bills and invoices for purchases and expenses

a evidence of capital on hand at the end of the year

all bank and building society statements, pass books, cheque stubs and paying-in slips which include details of business transactions

If you do not keep close and complete evidence you may end up paying statesman tax than is due because of lack of evidence of tax deductible financial loss or/and inaccurate sales evidence causing H M Revenue and Customs to judge your expected sales .

If you pay an accountant to prepare your accounts they will charge you based on how long it will income them. If your evidence are statesman close this will reduce the time taken and therefore reduce the magnitude they charge.

The above reasons are sufficient to ensure you keep good books and evidence but the most important rational motive is to ensure you person control over your business and that you can judge its profitability and the cash flow situation therefore ensuring you are alert of any potential problems as soon as possible and can make business decisions with all available information at hand.

Alan Butler is a director of A Butler and Company, contract certified accountants, based in Derby, providing a personalised service to local business owners and individuals.

Four Software Limited

5A Darley Abbey Mills

Darley Abbey

Derby

DE22 1DZ

Tel 01332 200 604

Fax 01332 344329

Email: bookkeeping@

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