Simple Book-keeping

1. What Do You Need?

You have to record all the money coming into and out of your business, both to keep track of your cashflow and for your tax records. An HM Revenue & Customs penalty regime is in force which places a duty of care on businesses, reinforcing the need for good tax records. To do this you will need:

1.1 A record of every sale.

• Cash businesses, such as shops, will use till rolls and point-of-sale systems to record sales.
• Non-cash businesses should issue an invoice for every sale.Update your accounts whenever an invoice ispaid. If you are keeping manual records, keep invoices in two files: Sales Paid and Sales Unpaid.

1.2 Invoices or receipts for every purchase.

• Enter invoices into your accounts system.
• For manual records you will need two files: Purchases Paid and Purchases Unpaid.

1.3 Records of payments into and out of your bank account.

• Open a separate business bank account.
• Ask for monthly bank statements.

1.4 Records of payments made by cash.

• Keep receipts for cash purchases in a Petty Cash box.

1.5 A Cash Book for summarising the information. Cash Books come in hard copy and electronic forms.

• You can buy an analysis book from a business stationer. This can be used as a hard-copy Cash Book.
• If you have accounting computer software , it will perform the same functions as a Cash Book.