Keeping Good Records
One of the ingredients of good accounting practices is keeping proper records. No matter how small or large a business, it is essential to have a filing/storage system in place to store all financial records. Financial records include receipts, invoices, bank tellers, cheque stubs, withdrawal slips, bank statements etc. With the advent of online banking, emails and other forms of online communication, more businesses are storing their accounting information in virtual form. More invoices and receipts are now sent by emails to reduce carbon print, whilst more payments are been carried out online than ever before.
Despite the advancement in technology to aid accounting communication, it is essential that all form of records is kept safely for easy access. This is crucial for accurate financial reporting and business decision making. If a business stores more information on IT systems than files, then a back-up system is important for added security of data. Filing systems must be easily accessible preferable in chronological order. It might also be necessary to keep records of incoming paper-format financial information on a system as back-up.
For taxation purpose documents – paper or computer generated must be kept for a minimum of five years after the end of the accounting period of the business.