What Records You Need to Keep for Your Business Accounts

Every business — whether you’re a sole trader, partnership, or limited company — must keep accurate records to show what money comes in and goes out. These records support your tax returns, financial statements, and protect you during an HMRC audit or other reviews.

1. Income Records

Keep detailed evidence of all the money your business earns.

Examples:

• Sales invoices and receipts
• Bank statements showing customer payments
• Till rolls or POS system reports
• Online payment processor records (PayPal, Stripe, Shopify, etc.)
• Credit notes or refunds issued

💡 Tip: Number invoices sequentially and keep digital copies for easy tracking.

2. Expense Records

Proof of every purchase or payment made by the business.

Examples:

• Purchase invoices and supplier bills
• Receipts for business expenses (fuel, supplies, software, etc.)
• Bank and credit card statements
• Petty cash records
• Staff expense claims and reimbursements

💡 Tip: Use accounting software to upload or photograph receipts — no need to store piles of paper.

3. Bank & Cash Records

Essential for reconciling your accounts and verifying transactions.

Examples:

• Business bank account statements
• Credit card statements
• Cash books or petty cash logs
• Deposit slips and cheque stubs

💡 Tip: Reconcile your bank statements with accounting records monthly to spot errors early.

4. Payroll & Staff Records

If you have employees, you must keep detailed payroll information.

Examples:

• Employee details and contracts
• Payslips and payroll summaries
• PAYE and National Insurance records
• Pension contributions
• Holiday, sick leave, and expenses records

💡 Tip: Keep payroll records for at least 3 years after the tax year they relate to (HMRC rule).

5. VAT Records (if registered)

Businesses registered for VAT must keep extra records.

Examples:

• VAT invoices issued and received
• VAT account summaries
• VAT returns submitted
• Import/export VAT documentation

💡 Tip: Maintain digital VAT records if you file under Making Tax Digital (MTD) rules.

6. Asset & Inventory Records

To track what your business owns and its value over time.

Examples:

• Asset register (equipment, vehicles, computers, etc.)
• Purchase receipts and depreciation schedules
• Stock and inventory lists with valuation dates

💡 Tip: Review and update asset records annually for accurate balance sheets.

7. Loan, Investment & Financing Documents

Anything that relates to borrowed or invested funds.

Examples:

• Loan agreements and repayment schedules
• Director’s loan account records (for limited companies)
• Investment contracts or share issue documents

💡 Tip: Keep clear records of all interest payments — they may be deductible expenses.

8. Tax & Compliance Documents

To prove you’ve met all legal and tax obligations.

Examples:

• Self Assessment or Corporation Tax returns
• HMRC correspondence
• Business registration and incorporation documents
• Insurance certificates and licenses

💡 Tip: Keep both digital and printed copies of key compliance paperwork.

Best Practices

• Go paperless: Use cloud accounting software (e.g. Xero, QuickBooks, FreeAgent).
• Backup regularly: Store copies in the cloud and on an external drive.
• Stay organised: Use folders for income, expenses, payroll, VAT, etc.
• Review monthly: Check reports and reconcile accounts consistently.

Summary Checklist