Clive Murphy Ltd.

Super Simple Bookkeeping

This approach is intended for very small businesses that have relatively few, low value transactions to record each week.

What you need
Use a blank exercise book with at least 52 double pages (one for each week).

What you do
On each double page, use the left-hand page for your income each week and the right-hand page for your expenses.

An example of a very simple cash book using an exercise book

When you receive a payment, write down the date you received it, who it was from, what it was for, and the amount. Likewise, when you spend money for business purposes, write down the date you spent it, who you paid, what it was for, and the amount. If you are not sure if something is a business expense or not, record it anyway.

Finally, keep copies of all your receipts and invoices. If there are only a few, you can staple them to the page. If there are too many for that, put them on a separate clip in date order. Use a clip that won't fall open if you drop it! If for any reason you lose or forget to get a receipt, record the payment anyway. The most important thing is to record every payment you receive and every expense you pay out.

Other Records

It is a good idea to keep a separate business bank account, but it is not essential. If you write business cheques, make sure you always complete the cheque book stub to show what the payment was for, and always use a bank paying-in book to keep a record of what all bankings were for - especially if they were not routine business income. If you get into the habit of recording your transactions right away (or at the end of each week), it'll be a lot easier to remember what they were for. Make sure you keep all your bank statements, cheque book stubs and paying-in books along with your cash book, and all receipts and invoices.

If your vehicle is not particularly expensive to run and you do not have too many business journeys, it may be best to record the mileage of all business journeys (date, where to, and how far it was), as you may be able to claim business motoring at 45p a mile. See my FAQ about motoring expenses. If you can't claim on the mileage basis, or if it isn't practical, just record the journeys for a sample period of a month during each financial year. Record the vehicle mileage at the beginning of the period, then all business journeys during the period, and the vehicle mileage at the end of the period. This is so that the proportion of business to private motoring can be reliably established. Without a mileage log of this type, HMRC could challenge the business motoring expenses claimed.

Unfortunately, following the Samadian case travel between your home and a regular and predictable place of business cannot be claimed as a tax allowable expense.

At the end of your financial year, make a note of the value of any stock you may have (at cost), and the details of any money owed to the business (such as by customers), or by the business (such as to suppliers), then pass everything to your accountant. It's as simple as that.

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