“This team is professional, helpful and unfailingly pleasant to deal with. Their skill in deploying cloud accounting software has helped us run our business more effectively.”

Christopher Atkinson, Yorkshire Laundry Services Ltd

Why and what?

When running a business and filing your accounts there are certain documents that you must keep in order to submit financial statements. Records also need to be kept to measure profitability of your business, to be able to secure loans and in case of a HMRC investigation, to have the necessary information.

It is also important to keep in mind that if you don’t keep accounting records, you could be fined £3,000 or disqualified as a company director, so it’s important to know your responsibilities.

Why is it useful to keep good records?

Keeping all your records in an organised order can help:

  • to maximise all the expenses you claim, reduce your tax obligations and make it quicker to prepare your accounts at year-end;

  • keep the information you need to hand to run your business and help it grow. This can help you plan to meet financial commitments such as paying creditors or employees;

  • To identify the strengths and weaknesses in your business and help you manage changes and make improvements in your business.

“So helpful…I only had a small query but they went out of their way to help me… I would highly recommend them.”

Teresa Mennell

You legally have to keep financial documents and company records. These are detailed below. As well as company and financial documents, you will also want to keep records of employee contracts and other contact details however these are not a legal requirement.

Financial records to keep

When running a business, you must keep a record of all items purchased or sold in order to create an accurate representation of your accounts. These are:

  • Receipts

  • Purchase and sales invoices

  • Records of all bank statements

  • Business tax returns

  • Business licenses and permits

  • Payroll records

  • Records of cash, bank and credit card transactions

Company records to keep

It is a legal requirement to keep a record of all your company information. This includes:

  • Details of all directors, shareholders and company secretaries

  • Shareholder votes and resolutions

  • Promises the company makes to repay loans

  • Transactions when someone buys shares in the company

  • Loans and mortgages secured against the company’s assets.

How long do I keep records for?

You must keep all company and accounting records for 6 years. However, these files can now be kept digitally, which is strongly encouraged, with the move to Making Tax Digital in the pipeline. Say goodbye to dust collecting files and folders on shelves, full filing cabinets with old records… Now all you need is access to cloud based software or a secure computer/laptop to file your company and accounting records.

Records must be kept longer than 6 years when:

  • The item bought is expected to last more than 6 years, such as machinery.

  • The company tax return was filed late.

  • HMRC has started a compliance check.

“We have been using their accounting services for 7 years. Kim and the team always provide a great personal service. They are always ready to help with any queries that we have, and the team have a great can-do attitude. They are a pleasure to work with. Highly recommended!”

Viv Taylor, LDT Design Ltd

Keeping your records digitally

All your documents can all be uploaded electronically onto cloud-based software such as Hubdoc, to then file digitally. When uploaded to Hubdoc, if you use Xero accounting software, these will then be automatically synced to your Xero account.

Filling your records digitally increases accuracy of data and keeps them up to date. By using cloud-based software you can also access your files anywhere on any device. You can use cloud-based software such as Hubdoc and Dext. Both of these use smart technology to extract data from your receipts, invoices and statements to upload these in a digital format that accounting software like Xero can read, you can do this by taking photographs of your documents or upload them electronically onto Hubdoc or Dext. At The Numbers Business we use Hubdoc and Xero to store our documents digitally and create our accounts. Xero makes keeping your accounting records simple and organised and again, can be accessed anywhere, on any device.

If you have any questions or want to find out more, please do get in contact with us.

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