Why should I maintain complete and up-to-date records?

Rachael, who heads up our Accounts department, discusses the importance of regular book-keeping.

As a business or trader, it's often very easy to get into the habit of an “I'll do it later” attitude. As we are all aware, years fly by and our books can easily get further and further behind.

Here are just a few reasons to keep your records up to date:

1. It's a weight off your shoulders

How many hours are wasted on people thinking about the tasks they are yet to complete, as opposed to the business ideas they have? If you keep your accounts up to date, you can spend your time generating new plans and thinking of ways to make your company more profitable.

2. It ensures enough cash is in the business to fund potential new ventures

If you want to fund a new venture, you need to know you have the money to do so and going by the balance in the bank is not always the correct approach. There are other things to consider, such as:

• Have you got suppliers to pay?
• Are there bank loans which have covenants you cannot breach?
• Can you continue current trade if this money is taken out for the new venture?

3. Records are more accurate

More often than not, when something is fresh in our head, we can create more detailed documentation and identify what an expense relates to. Otherwise, when you buy items under one invoice for separate projects, you may forget the split for example.

4. It cuts down on time

Have you ever had records spread out over your desk and struggled to collate them? If you recorded them when they were received, it would have cut down on the time, as you would know where to record and file them.

5. Instant retained records

If HMRC launch an investigation into your business, you will not have to sit wading through receipts, as you will be fully up to date and know where expenses are allocated.

Sometimes, of course, all this is easier said than done. You may feel there is not sufficient time in the day to complete all the tasks. But have you explored all options? What about using computerised software or getting a book keeper to help? Even getting a second opinion on the most efficient way to maintain records. If this is something which you would like to discuss, please do not hesitate to get in touch with me on 0115 9555500 or email enquiries@pagekirk.co.uk.