Q: How do I best keep records of profits and losses for my tax purposes?
Jan 26 2007
Answered by: Philip Wilkinson Ask a question
It is suggested that you keep up-to-date records of all transactions on an ongoing basis. This will let you easily produce records for tax purposes, including VAT. It will also enable you to see how the business is doing, in terms of actual against forecast, profit / loss, cash flow etc. at any time. This is particularly important, as bad management control of cash is a major factor in causing business failure.
When you know what to do, all this is straightforward and routine. There are plenty of inexpensive books and courses available to get you started. A particularly good one is “Understanding Accounts” by Adele Hayward and Stephen Brookson (DK Publishing) for about £5 - £6. There are many other books also available for around this price.
Alternatively, you can use a part-time self-employed bookkeeper to manage this part of the business for you.
For financial information and advice, visit the Business Link for London website. Click here.
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