Guide to setting up in business part 4 – Accounting Records
In the fourth of this five part article regarding setting up in business we look at accounting records. The previous three articles covered the legal status of your business, who you need to notify and PAYE & VAT considerations.
There is a legal requirement to keep accurate and full records of all business income and expenditure. It is therefore vital to get a proper accounting system in place right from the beginning. Don’t leave it and to sort out later.
The type of system you need depends very much on the size of the business and the number of business transactions.
For very small business with few transaction then a manual system is adequate. This can be a very basic accounts book in which items are manually entered or a slightly more technical approach using spreadsheets.
For anything but the very small businesses however it is well worth considering investing in some purposely designed accounts software such as Sage or the less popular (and disliked by many accountants!) Quickbooks. The problem with a manual system, even those involving spreadsheets is that they are very error prone and the more transactions there are the more difficult it is to keep track of and the more errors are made. A good accounting software program however when used properly will save time and produce much more accurate results. In saying that accounting software, no matter how good it is, when used by someone who doesn’t know what they are doing will normally end in tears. Therefore if you are going to use an accounts package it is vital to ensure that you get proper training in how to use it or alternatively get someone to do it for you.
At Michael Paul Accountants we offer a full bookkeeping and onsite service. This means we can carry out your bookkeeping either at your premises or at our office or alternatively we can train you in using your software and come and see you when needed just to answer any questions you may have and make sure everything is running okay.
Finally you should keep all accounting records for a minimum of 6 years.
If you would like to discuss setting up in business or any other accounting or taxation issues please don’t hesitate to contact us. We are an ACCA registered accountancy practice located in the Northamptonshire village of Lamport. From Michael Paul Accountants Market harborough, Northampton, Market Harborough and Corby are all within easy reach.