Keeping accurate, complete records is the cornerstone of any business worth its salt – without them you could land yourself in serious trouble.
Banking info, proof of income, expenditure and wages – all of these things need to be thoroughly documented to make your life easier when tax time rolls around.
Up-to-date, organised and easily accessible records will help you:
- Fill in your tax returns quickly and easily
- Save you money by making it quicker for your accountant to process your finances
- Ensure you pay the correct amount of tax
- Give you the information you need to see your business grow, and
- Make it easier to get business loans.
Accurate records are a legal requirement and a folder full of crumpled receipts just won’t suffice. But don’t panic. If your business admin could do with an overhaul, here are five easy steps to perfecting your business’ archiving today.
1. Understand What You Should Be Keeping
There are four sets of financial records that should always be kept when running a business:
- Sales ledger – this will help you monitor the sales you’ve made and the money you’ve received, as well as any you’re owed.
- Purchase ledger – this will help you monitor your outgoings as well as any money you owe.
- Cashflow and summary – this is a central record of all the money that comes into and goes out of your business.
- A wage book – this is a record of your employees’ gross pay, as well as any tax, national insurance or student loan deductions.
Whilst computerised systems have considerable advantages over paper ones, having hard copies of your records is essential. These should be kept securely and archived appropriately when they are no longer in use (as a general rule, financial records should be kept for six years).
2. Set Up a Filing System
A good filing system will make your life considerably easier. Allocating an adequate amount of space and purchasing quality filing equipment (such as filing cabinets or archive shelving) makes storage and retrieval of records a stress-free process and is the backbone of any filing system.
Action trays are a useful way of monitoring what you have and haven’t completed – categories such as ‘to do’, ‘to pay’ and ‘to file’ are particularly useful.
Keep different types of records separate and label them well, and make use of dividers and colour-coding systems to ensure your files are organised appropriately in either chronological or alphabetical order.
Think which documents are best kept together – outgoing invoices and remittance advice for example – and date mark them when they have been sent and paid.
3. Assign a Responsible Individual
The fewer people involved in record keeping and archiving, the better as it avoids error confusion. If it’s at all possible then your business should employ a sole individual whose main responsibility is the maintenance of your records. If you’re not in a position to do this then see the next step.
4. Set Aside a Regular Time Slot
If you aren’t able to allocate a responsible individual then it is absolutely vital to earmark a certain amount of your time for filing – even if it’s just ten or twenty minutes a day.
Sales and purchases should be recorded daily, and receipts, invoices and remittance advice should go into appropriate action trays or file immediately upon being received.
Pay your bills weekly, reconcile bank accounts at least monthly, and you should also set aside a regular slot to chase outstanding payments.
5. Keep them Safe and Secure
Fifth and finally we come to perhaps the most important step to perfecting your archiving system – safety and security.
Investing in fireproof storage is essential for paper documents, particularly those that can’t be copied or computerised such as cheque book stubs and paying-in books.
Hopefully these tips will be useful to even the most hapless of administrators. Whilst a good filing system may take time and effort to set up, it really will make your business run more smoothly in the long run.
Author – RHP Racking is a specialist provider of racking & storage solutions in the UK. We have over 40 years’ experience in the industry and aim to be the best provider of storage solutions in the UK. Visit us today to find the perfect archive shelving and storage equipment for your needs.