The "Books"
Whatever kind of business you run; you are required by law to keep financial records. Keeping financial records gives a number of benefits:
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To meet your legal obligations and set up a basic system this is what you need.
There are four basic sets of financial records that you need -
It saves you time money whenever you need figures to back you up
-It keeps you up-to-date with how much you owe and how much you are owed
-It also helps you to ensure that you only pay the tax you owe.
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HM Revenue and Customs require all business owners to keep financial records and retain them for at least six years.
There are no rules about the format you must use to record your figures - those kept on paper are just as valid as those stored on computer.
What's important is that you keep accurate, relevant financial records and update them regularly. Financial penalties can be imposed if you fail to keep
accurate records to back up your VAT, income tax and payroll returns.
Although the level of record keeping required may vary from business to business, it should include:
The cash book
-The sales ledger
-The purchase ledger and
-The wages book.
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All amounts received
-All receipts and expenditure
-All goods purchased or sold