One of the requirements for all businesses is that appropriate accounting records are kept for at least six years from the end of the accounting period, in case of an inspection request from HMRC. Dependent upon the number of business transactions, there are various methods of keeping these records.
For very small businesses, manual records, such as a written or Excel cash book, may be sufficient. There should be separate sections showing a breakdown of the income and expenditure for the accounting period.
For businesses that have large volumes of transactions, however, the above method is likely to be impractical and time-consuming. This is where it may be useful to consider using one of the many computer-based accounting packages available.
One of the most useful and specialised packages for farming businesses is Farmplan. This allows users to input sales and purchase invoices in order to keep track of income and expenditure during the current accounting period. It also allows users to keep track of any outstanding receipts or payments to be made. It is particularly useful in that it allows the owners of farming businesses to input values and numbers for livestock and deadstock, and to show any movements during the accounting period. If the business owner does not wish to maintain these records themselves, one of the services offered by Promar is the preparation of reports such as trial balances from raw data provided by the business owner. These reports can then be used very efficiently to produce the final accounts for the business.
There are various other packages available, including Quicken, QuickBooks, Sage and Xero. These can be purchased online and should be selected depending on the needs of the business and the preferences of the user. The packages include ‘Help’ sections to aid users.
Green & Co are able to offer advice to business owners regarding the most appropriate method of keeping their accounting records, depending on the individual circumstances of their business. We are also able to offer training on the use of Sage, and offer a bookkeeping service for those businesses that would like to outsource this. For more information, please contact us on 01633 871122.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.