Accounting and Bookkeeping

Q: What accounting records do I need to prepare and how long do I need to keep them for?

A: All businesses need to keep records. They can be maintained by hand or may be computerised but should contain details of payments, receipts, credit purchases and sales, assets and liabilities.

The books and records are used to produce the accounts. If the records are well kept it will be easier to put together the accounts. Accounts must be prepared for the Inland Revenue and if a company is formed there are strict legal requirements as to their format.

The Inland Revenue and H M Customs and Excise require you to keep your accounting records for 6 years. Modern software systems do not force you to print out your records so it is particularly important to ensure that you have a complete print of each year’s accounting records.

Q: Should I keep manual or computerised records?

A: Whilst a business is small a simple records of payments of receipts should be easy and quick to complete. You will also need to keep track of which of your customers haven’t paid you and who you owe money to.

As your business grows a manual system may become more difficult to manage and management information will take you a long time to prepare. A computer system is very good for quickly summarizing transactions and the amount of duplication is greatly reduced. Simple accounting packages can cost from £75-£100. The data can often be backed up and e-mailed to accountants for them to review and advise upon.

www.accountingweb.co.uk has a software directory where you can search by supplier or industry. You can also register your own software with them.

If you would like to ask a specific question or request a more detailed fact sheet please email us.