It doesn’t matter what type of business you run you still need to keep accurate records and maintain a decent filing system. Your bookkeeping filing system doesn’t have to be complicated though you can keep things very simple and ideally colour coded like the example below: –
RED FOLDER(S) – Sales Invoices & Credit Notes
BLUE FOLDER(S) – Paid Supplier Invoices & Credit Notes & Unpaid Supplier Invoices
BLACK FOLDER(S) – Month End & Management Reports, VAT, Petty Cash, Bank Statements
GREEN FOLDER(S) – Payroll, Staff Records
MAUVE FOLDER(S) – Business correspondence
Ideally keep your bookkeeping paperwork in alphabetical and chronological order so it’s easy to find. If you want to keep everything paperless and be kind to the environment then set up similar folders on your computer, laptop or hard-drive but make sure you have everything backed up. There are a lot of options available these days including the cloud.
Finally remember, you need to keep your financial documents and other items like insurance policies for at least 6 years. If you are a director and you don’t keep your accounting records, you can be fined £3,000 by HMRC and disqualified as a Director.