Maintaining Proper Books and Records Doesn’t Have To Be a Difficult Task

Company law and tax law require companies and sole traders to maintain proper books and records. While this may appear to be a time consuming and thankless job for small businesses, the benefits of maintaining proper books and records can be very significant and may save the business time, energy and headaches when dealing with their accountant, or worse still a tax audit!

While certain regulated industries and larger businesses may have stricter book keeping requirements, at its simplest, maintaining proper books and records doesn’t have to be a difficult task and boils down to the following items;


All business bank statements should be kept on file and care should be taken to ensure that none are missing. If a computerised accounting system is in use, then all payments and lodgements should be posted to the system and the bank statements should be reconciled to the accounting system regularly. Any unreconciled differences should be investigated as a payment or lodgement may not be posted to the system.

Personal bank statements should also be kept on file in case business expenses have been paid out of this. Any business items should be highlighted on these.

Sales Invoices

All sales invoices and sales credit notes should be kept on file. It is best to have a unique invoice number on each invoice (ie. the first invoice should be numbered, INV001, the second, INV002 and so on). Managing sales invoices this way should help ensure that a missing invoice can be identified easily. These invoices should be posted to the accounting system and the net amount and vat amount should be posted separately if the business is Vat registered.

Purchase Invoices

Again, all purchase invoices and purchase credit notes should be kept on file. For identification purposes it helps to sequentially number each invoice and enter the reference on the accounting system (this should help locate the invoice when going through your records). These invoices should be posted to the accounting system and, again, the net amount and vat amount should be posted separately if the business is Vat registered.

Debtors and Creditors Listings

All computerised accounting systems will generate creditors and debtors listings at a point in time, showing the balances owing to and from suppliers and customers. These lists should be reviewed regularly for accuracy to see if they are in agreement with the businesses expectations. These listings should also be reviewed for negative items which usually indicate that there is a sales invoice or a purchase invoice missing or not posted to the system.

Payroll Records

If a business is employing staff, it is best to use an off the shelf payroll system. It is important that the person responsible for processing the wages has adequate training on the system and that regular backups are taken. Monthly P30 returns to revenue can be made using the reports generated from the payroll system.

Vat Records

Records of the invoices making up Vat on sales and Vat on purchases for each Vat period should be kept and ideally this should be done from the accounting system. The records submitted to revenue should be reviewed regularly to ensure that all invoices posted to the system have been submitted on a Vat3 return to Revenue.

Maintaining Records

Revenue require businesses and individuals to keep their records for a period of six years (unless advised otherwise by the Inspector of Taxes).

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