Tips to Help You Stay Organized With Your Accounting Records

Let's face it, keeping track of your accounting records is tedious! And believe us when we say that you are not alone if you only organise your accounting records after your accountant requests for them.

To assist, I've created a list of suggestions to make the tedious chore a little easier while being HMRC compliant.

After all, sloppy accounts could result in a hefty accounting charge or cause you to overlook business expenses that you personally paid for!

HMRC's Self-Employed Accounting Record-Keeping Requirements

If you are self-employed, you must retain records of all your business revenue and expenses for at least 5 years following the relevant tax year's 31 January reporting deadline.

So, if you filed your 2016/2017 tax return online by January 31, 2018, you must maintain your accounting records until at least January 20, 2023.

Accounting and business records are two terms that are used interchangeably.

The following are examples of accounting records:

• Statements of account

• Invoices from Customers

• Invoices from vendors

• Forms and receipts for cash expenses

• Statements and receipts from business credit cards

• Claims for mileage

EBay statements, Paypal account statements, and Etsy income statements are examples of statements that detail your online earnings.

You should keep similar records for any other sources of personal income that you need to declare on your self-assessment tax return.

How to organise Your Accounting Records Organized

The amount of accounting paperwork a company receives and needs to store varies each company, as does determining the best way to organise accounting information. Here are some basic tips for developing a solid record-keeping system that will please HMRC, as well as automating and shortening some of your administrative tasks.

1. Go to the internet

HMRC used to compel firms to keep hard copies of their paperwork for the whole six years, which caused storage concerns.

Fortunately, Hmrc has caught up with the times, and soft copies of financial documents are now accepted as proof of business income and spending. This implies you can use GoogleDrive or Dropbox to store your account organise.

You may preserve items like monthly bank statements and invoices on an ongoing basis by building an online folder structure, which is lot easier than permitting your paperwork pile up.

You can use a printer to scan in things like your cash expenses. Alternatively, the Google Drive app features a photo-taking option, which means your receipt is immediately captured and saved in your Google Drive.

There is no right or wrong method to set up your cloud file structure for preserving your company paperwork online, and you may have to experiment to find the best solution for you.

2. Open a bank account for your business.

Consider creating a business bank account if you don't already have one (along with a deposit account so you can set aside your tax money on a regular basis). While it is not a legal requirement for self-employed people to open a company bank account, HMRC recommends it.

All of your business income and spending will be captured in your business bank account, making bookkeeping a breeze. If you request a debit card to go with your business bank account, you'll be able to pay for your day-to-day expenses directly from your account, eliminating the need to claim cash expenses (don't forget, you'll still need to scan and store all of your business receipts every time you use your debit card).

3. Use a different credit card for each transaction.

If you don't have a business bank account, you can make all of your business purchases with a personal credit card. All of your expenditures will be in one place, making it simple to compile your data at tax time. Remember to retain all of your receipts and scan them into your cloud storage along with your credit card statements whenever you receive one.

4. Delegate the task to someone else.

If you have a bookkeeper or virtual assistant, you could ask them to assist you with accounting admin if you can trust them with secret business information. You can establish a schedule that works for you, such as always sending them your receipts, having your accountant analyse your credit card statement for your expense claim, or having your accountant communicate directly with them what records need to be gathered.

Accountants in Croydon help small businesses and startups with their accounting and taxation matters, to keep their business running smoothly.