Frequently Asked Questions

How do I keep a record of my income and expenditure?

All businesses need to keep a record of their income and expenditure to enable them to keep track of their financial position and for tax purposes.

The main record of income and expenditure is the cash book. This records the flow of cash coming in and out of your business. However, many businesses offer credit to their customers (an agreed time to pay after receipt of the goods/service) and therefore a careful record of what the business is owed and what it owes, needs to be kept.

Every time you make a sale an invoice is issued and the details need to be recorded in a sales ledger. The sales ledger allows you to keep track of which invoices have been paid and which are outstanding and need to be chased up.

Similarly, a purchase ledger is required to record all the purchases that you make and again this allows you to see which bills are outstanding at any time.

When income is received or a payment is made, the details will be entered in the cash book and the date paid will be entered in the sales or purchase ledger accordingly.

If your business is registered for VAT, both the sales and purchase ledgers allow you to record the VAT you owe and the VAT you can claim back, thus assisting you in the completion of your VAT return.

If you need a more detailed response or would like to know more about how we can support your business, please contact us by using our Contact Us form, or alternatively you can email us at info@edeal.org.uk or call us on 0844 2640390.

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