Running a business:
Basic records

Businesses need to maintain accounting records. The basic records that all businesses need to keep include:

Bank statements, cheque books and paying in books

Credit card statements

Details of amounts paid out of petty cash

Copy sales invoices

Original invoices for all purchases (the invoice itself rather than the supplier's statement)

Details of any amounts that you personally pay into or take out of the business

PAYE records

VAT records

Fixed asset details

Stock at the year end

List of outstanding debtors and creditors at the year end.

In addition, we would always recommend that you keep:

a cash book and a petty cash book, that analyse the income and expenses into different categories. Income, for example, could be analysed as VAT, income from sales and other income. Payments could be analysed into VAT, purchases, payroll, motor expenses, rent and rates, telephone etc.

a sales day book, that lists details of all the sales invoices issued such as invoice date, invoice number, customer, customer reference, gross amount, net amount and VAT

a purchase day book, that lists details of all the purchase invoices received such as invoice date, purchase invoice reference number, supplier, supplier reference, gross amount, net amount and VAT, expense category.

You may also want to keep sales ledgers and purchase ledgers. These maintain records, by supplier and customer, of invoices, receipts and payments. They enable you to readily identify those customers who have not yet paid and those suppliers whom you have not yet paid. A further ledger that you might want to maintain is a nominal ledger, which would enable you to prepare management accounts. These ledgers will be prepared automatically if you have a computerised accounting system.