How do limited companies manage their bookkeeping?
Put simply bookkeeping involves keeping a record of your business transactions, including all income, expenses, and any loans. If you operate your business as a limited company, having up-to-date bookkeeping records will help you make sure the business stays in great financial shape.
Maintaining accurate bookkeeping records is essential, because this information is used to prepare your annual accounts and tax returns. These are submitted to HMRC so that they know how much tax you owe. It also means you can keep track of your profit and cash flow, helping you to make better, more informed business decisions.
What bookkeeping records should a limited company keep?
Limited companies are required to keep double entry bookkeeping records. This basically means that all transactions are recorded with their opposite entry, which we explain in the guide!
HMRC are rolling out a new tax system called Making Tax Digital, which requires businesses to keep digital bookkeeping records. The new rules are coming into force in stages, but getting a head start on the keeping your records digitally can’t hurt!