There will be many businesses for whom the simple system described above will not be sufficient. This will apply to you if you make many sales or purchases each month and keep a lot of stock on the premises. There will be an increasing number of documents and records needed. Your business may need to set up a system for recording information which includes some or all of the following records. And it may well be appropriate to introduce a computerized accounting system.
PURCHASE ORDERS
This could be a formal document which has the name and address of supplier plus the goods ordered and the details necessary for that. A copy of your letter may suffice, as long as they are numbered and kept in a file. This document will be needed to ensure that what the supplier sends you is actually what you ordered.
A RECORD OF WHAT GOODS ARE RECEIVED IN THE BUSINESS
As your business grows, you will no longer know yourself exactly what has come in; there may well be employees who do this for you. The only way to keep track of what has been received is to have a formal way of recording it. This could be a specially prepared form to fill in and match against the purchase order. Or it could be a book in which you write down the details. Whichever it is, the details are needed before a supplier invoice is passed for payment.
WHAT HAVE YOU GOT IN STOCK?
You need to know at any time what raw materials or finished goods you have got in stock. Going to have a look is not the best way of doing this. Written records are the answer because:
? they are the best way to control and plan your business
? they will protect against staff pilfering.
If you have lots of different items which you keep in stock, stock cards may be the most suitable way of recording what there is. With fewer items, a stock book may suffice.
SALES INVOICES
This could be a printed form or it could be typed on business stationery and a copy kept.
EMPLOYEE TIME SHEETS
For certain sorts of businesses, for example, manufacturing or assembly, records of how many hours employees work are important and are the basis for paying wages. You could keep a time book with a simple record of when the employee started work and when the employee finished for the day. You also need to keep records for the Working Time Regulations.
PETTY CASH VOUCHERS
As the business gets bigger with more employees, a proper petty cash voucher will become a necessity. This should show the date, the employee who received the petty cash and what it was for. Any voucher should be signed by an appropriate responsible person with the authority to do so. Wherever possible a receipt should be attached to the petty cash voucher.
WAGES RECORD
You have certain legal duties towards your employees. These include giving an itemized pay statement and deducting tax and national insurance contributions from salaries and wages. Proper records need to be kept and the Inland Revenue will send you forms to complete. You must keep the following information for all employees:
? name and address
? national insurance number
? PAYE reference number
? pay
? pension deductions
? any other deductions authorized by the employee.
The actual wages record needs to show the payments made:
? grow pay, with a breakdown of how this is made up, for example, bonuses and commission, as well as basic wage
? pension contributions
? total pay this period
? total pay to date
? tax-free pay to date
? taxable pay to date
? tax due to date
? tax paid to date
? tax due on earnings for this period
? employee’s national insurance contributions this period
? other deductions
? net pay
? employer’s national insurance contribution
This is also information which needs to be set out on an employee’s pay slip. You also need to keep records on Statutory Sick Pay and Statutory Maternity Pay and to keep records to show that you are meeting the requirements on the minimum wage and Working Time Regulations.
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