Good record-keeping underpins a well-run limited company. From invoices and bank statements to shareholder information and company decisions, there are a number of records your limited company is obliged to keep. Getting this right can save you time, money and a lot of unnecessary stress.
What financial records do you need to keep?
Your company’s accounting records need to be detailed enough to show and explain its transactions and allow you to prepare accurate accounts.
That means keeping records such as:
- Sales and purchase invoices
- Receipts and expenses
- Bank statements
- Money paid into and taken out of the business
- Details of assets and liabilities
- Stock records, where relevant
- Contracts and other documents supporting significant transactions
- Records supporting the figures in your accounts and tax returns
Ultimately, you should be able to look at your records and understand where the company’s money has come from, where it has gone and how the figures in your accounts have been calculated.
Record-keeping beyond the numbers 
Limited companies also have wider responsibilities around their corporate records. It is the directors’ responsibility to ensure the company keeps adequate and accurate records.
You must keep details of:
- Shareholders and the results of any shareholder votes and resolutions.
- Promises for the company to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to.
- Promises the company makes for payments if something goes wrong and it’s the company’s fault (known as “indemnities”).
- Transactions when someone buys shares in the company.
- Loans or mortgages secured against the company’s assets.
Some records should be submitted and maintained externally, such as providing registers of directors, directors’ residential addresses, company secretaries or people with significant control (PSCs) to Companies House.
How long should you keep your records?
You must keep records for 6 years from the end of the last company financial year they relate to, or longer if:
- They show a transaction that covers more than one of the company’s accounting periods.
- The company has bought something that it expects to last more than 6 years, like equipment or machinery.
- Your corporate tax return was submitted late.
- HMRC has started a compliance check into your corporate tax return.
Most companies now keep digital records. It’s important to ensure this data is secure and backed up regularly. A good cloud accounting system such as Xero helps to organise your financial records efficiently.
Informing business decisions
Keeping accurate records isn’t simply about satisfying HMRC or Companies House.
‘Up-to-date accounts and bookkeeping can show you whether you’re actually making money, where your cash is going, what you’re owed and what you owe,’ says Anna, Accounts and Operations Manager with Spicer & Co Chartered Accountants in Dunstable. ‘They can also highlight potential problems before they become real with potential costs attached.
‘Importantly, accurate, well-organised records help you plan ahead, making informed, proactive business decisions.’
How we can help
Is your company’s record-keeping up to scratch? A quick review now could save you considerably more time and hassle later. Let’s arrange an initial discussion without obligation.