Record keeping day to day
Effective and accurate record keeping is key to keeping track of your company finances and to see the health of the company finances. Getting your record keeping and day-to-day management right at the start will save you time and free you up to be more productive.
Tip
Add a 15 minutes slot in your diary each week to keep your records up to date. Being focused on admin in short bursts makes it less stressful.
By doing little and often, the information is fresh, it's less of a chore and you're less likely to miss something.
The importance of records
Put simply, to remain in business you need to ensure that you have enough money to pay the bills. That means that you need to ensure adequate cash flow or investment to satisfy outgoings.
Keeping track of expenses and more importantly future liabilities, such as taxes, will help to ensure that you retain enough cash within the business to stay in business.
As a business you also need to have an audit trail for anything that is related to what HMRC is likely to require records for, and these records need to be kept for at least six years. This covers all income and Corporation tax. It can sound complicated, but simple tracking can ensure you have all the information you may need at your fingertips.
Records you need to keep for HMRC
At first glance it can seem a lot however, with Provestor you'll be keeping track of your records for properties held in your company as you use the software day to day.
Personally held property
If you hold properties outside of your limited company, complete and accurate records are still important to be compliant with HMRC. Take a look at this guide for more information.
Tenant records
HMRC require you to keep records of your tenants including the dates you let out your properties. You can create tenancies in Provestor and capture all the information needed for complete records.
Rent and other income
Income records are important to satisfy HMRC requirements and for accurate taxes and year end company accounts. With Provestor it's easy to create and send invoices for rent or for any services you give to tenants (e.g. charge for maintenance or repairs).
If you use an agent and they send you a rental statement, you will need to create an invoice in Provestor. This ensures your taxes are calculated accurately and our accountants will have the records they need for your year end accounts.
Bank statements
With the modernisation of banks and with online banking, this has become easier. You'll need to keep or have access to 6 years of bank statements should HMRC request to see copies.
Business expenses
Expenses can sometimes be the most difficult items to keep track of from a business perspective but there are some sure-fire ways to ensure that you track them quickly and properly.
- Ensure that you use your business bank account to pay for the majority if not all of your expenses; this is a better separation of your expenses from your personal spending
- Make sure you keep the receipts safe either digitally or in their original paper form
A note on expenses: There are rules regarding what constitutes a business expense for tax purposes. HMRC is clear on what is an allowable business expense: “The costs you pay with the sole purpose of earning business profits are allowable expenses”.
Record keeping
You need to keep hold of receipts as evidence should HMRC request to see them. Paper or digital copies are acceptable.
Business travel in a personal vehicle
We’re talking specifically about business mileage in this section. If you are using public or hired transport, this is covered in the expenses section above as there is an audit trail of receipts.
For business mileage is it important to track and log the journeys accurately. You do need to ensure that the mileage claimed can be supported by information showing the purpose of the journey.
We've made this easy for you - within the expenses feature of Provestor you can record all the important information in the mileage log.
Payroll records
If your company will pay anyone a salary, they will be on your company payroll. This means you'll have a PAYE scheme setup for your company and will submit payslips to HMRC electronically every month.
All the records required by HMRC are submitted in realtime by our software so your records are taken care of.
Dividends
If a company will pay its shareholders dividends from company profits, it's important they are formally recorded as dividends. This means that dividend vouchers must be produced.
When you want to pay a dividend, Provestor has everything you need and will generate the records to ensure you're compliant.
Property purchases and sales
Large sums of money move around when a property is bought or sold so keeping documentation for your records is important.
Keep any documentation safe related to the sale or purchase including mortgage offers, solicitors fees and stamp duty.
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