Keeping Financial Records for Your Business

 Keeping Financial Records for Your Business

Thinking of starting up a business? In most cases there's a lot of ground to cover once you've been hit with that creative flash of inspiration and setting up an efficient system for record keeping is usually a part of that.
Keeping a detailed log of your finances may be low on your list of priorities, but doing so can play a vital role in the success of your startup. Not only that, but he law requires that businesses keep accurate financial records and good bookkeeping may save you time, money and worry later on should you need to produce a financial report.

Your records should include all receipts, invoices, all goods that you purchase or sell, bank statements and relevant details relating to staff payment if you are an employer. The details of which records to keep will vary according to the size and type of business that you run, but you should be aware that you may be liable for financial penalties if you do not keep adequate records.
Though many businesses still prefer to keep their records on paper, tucked away in files, increasingly, in an age when business is ever more reliant on technology, many are opting to computerise their record keeping system.

Computerisation can allow you to update, amend and share your records remotely. This can make record keeping software a useful tool in keeping up with your company finances, particularly if you choose to outsource your accounting, or if you would like to keep a tab on the record that an employee is keeping on your behalf.

As a general rule, by law businesses need to keep records of financial transactions for a period of at least six years, though the length of time and the exact records that you will need to keep may vary according to the type and size of business that you run.

When in the process of setting up a business, keeping accurate and adequate financial records may simply feel like a pain when your time and resources are likely to be stretched. Nevertheless doing so could have a number of benefits for a fledgling business, including providing evidence of the financial foundations of your company should you seek to obtain additional finance from outside sources.

Whether you choose to do it yourself, assign the task to an employee, or outsource to an accountant, keeping accurate detailed records of your business can help you on the path to building firm financial foundations.