If you don’t keep adequate business records, HMRC will fine you up to £3,000. Worse still, not having a handle on your business finances makes running your company more difficult on a day-to-day basis because you won’t be sure of what’s coming in and, more importantly, what’s going out.

In this article, Burton Beavan considers how you can keep better business financial records and what the value to you as a businessperson will be of doing so.

Better business records – no excuses 

It’s fair to say that general bookkeeping has never been a popular pastime among the self-employed and company directors. However, gone are the days where you would wait until the end of the quarter and send all of your invoices and receipts to your accountant to get the VAT bill worked out.

Burton Beavan recommends that our clients use Xero – the online bookkeeping package. By updating it every week (ideally every time you issue an invoice or receive a bill), you will stay on top of your accounts at all times.

These updated figures will give you and us better figures to work from meaning that forward financial planning becomes possible and that we can make use of every deduction possible to reduce your tax bills (personal and business)

Better business records – know better how your spending money

Particularly when business is doing well and the amount of money in your account has been rising month on month for a while, it’s sometimes easy to lose track of your expenditure.

Working with Burton Beavan and by updating your Xero bookkeeping software on a regular basis, you’ll know who your money is going to, how much, and why. With this sort of visibility, it’s much easier to identify areas where you can save money and make more money from the same amount of work.

Better business records – what type of records should you keep?

Invoices you send out and invoices you receive.

Work with us to come up with a consistent system to marry up sales invoices with expenditure so you have a much clearer idea on your level of gross profit. Also, remember that if you’re VAT registered, you’ll need to display your VAT number. Likewise, if you’re a limited company, you’ll need to show your registration number on your invoice.

The way you record invoices you pay out on makes a difference to the amount of money that be claimed as an expense – nearly every expense will reduce your net profit level which, in turn, means that you pay less in tax.

Better business records – how to save time keeping better business records

Keeping better business records is more about keeping a routine rather than an in-depth knowledge of bookkeeping, bookkeeping software, or accounting. Remember that Burton Beavan, as your accountants, take the raw information you provide us with and then restructure it in the most advantageous and accurate possible way to bring down your VAT, corporation tax, and personal income tax bills.

Using Xero is so much easier than the previous paper-based system. Prior to accurate and updated bookkeeping, businesses and individuals were paying thousands (sometimes tens of thousands) in tax more than they needed to every year because of the lack of immediate and categorised financial information.

Better business records – work with Burton Beavan

You need to keep your VAT records for 6 years and Self Assessment records for 5 years. There are other time limits placed on different areas of record-keeping for your business. Having them electronically stored on Xero and then properly managed by Burton Beavan will mean that, if HMRC have any queries, you have all the information they need to hand.

For help in keeping better business records, speak to the Burton Beavan team today on 01606 333 900 or email hello@burtonbeavan.co.uk.