Record keeping is one of those tasks that you might not want to do as a business owner, but you absolutely have to. Whether you run a window cleaning business in Worthing or sell globally on Etsy, it’s a legal requirement to keep records of your income and expenses. This is the basis of many must-do bookkeeping tasks.
But if you’re busy running a business, record keeping is probably the last thing on your mind. Luckily, you’re not alone. That’s why we’ve put together this guide full of tips to simplify your record keeping and perfect the basics of good bookkeeping.
Choose Your Record Keeping System
As a small business owner, it’s a legal requirement that you properly store and organise your financial records. To do this, you need a record-keeping system.
Long gone are the days of paper record-keeping; we definitely wouldn’t recommend this for your finances. It’s much harder to keep track of paper documents, submit proof of your income and expenses, and send records to your bookkeepers, making this a definite no-go.
Instead, set up a digital record-keeping system. Some business owners like to do this with spreadsheets and digital invoices/receipts, which is fine, but not the most efficient way to record your finances. This method is notoriously time-consuming and puts all the labour on your shoulders – not ideal when you’re trying to run a business!
At Angel Bookkeeping and Payroll Software, we prefer using cloud-based bookkeeping software. This cuts down on lengthy set-up times and automates a lot of tasks, with a tried and tested system in place that you simply need to follow.
When working with our team, we’ll set your business up with profiles on Auto-Entry and Sage, digitising your finances for streamlined, accurate record-keeping.
MTD for ITSA: Updating Your Systems
Legal requirements for record-keeping are changing. From April 2026, sole traders and landlords with a turnover of £50,000 or more must follow Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) guidelines. You’ll need to use MTD compatible software when recording your income and expenses, and submit quarterly digital reports.
From April 2027, these rules will apply to sole traders and landlords earning over £30,000, and in 2028, they’ll apply to turnover of over £20,000.
If you need to update your record-keeping system to stay compliant, we can help. Our team is clued up on all the MTD for ITSA changes and will be happy to upgrade your finances now to avoid any last-minute stress.
You can also learn more about what you need to do in our MTD checklist for 2026.
Know What You Need to Record
Even when working with our team, it’s a smart idea to know what you’ll need to record. This ensures that you send us the right financial information when needed and stay on top of your cash flow. A little bit of bookkeeping know-how can be a handy asset when understanding your business finances, too.
You’ll need to keep evidence of all cash coming into your business, as well as any allowable expenses you want to claim. Records you’ll need to have include:
- Sales invoices
- Purchase receipts
- Bank statements
- Payroll records
You may also need to keep track of more specific expenses (like mileage logs if you’re claiming on the use of a vehicle). If you’re unsure of what you can and can’t claim as a business expense, get in touch with our team and we’ll be happy to advise you.
Keep Records As You Go
Rushing to catch up with your bookkeeping is the worst, especially if tax deadlines are just around the corner. Our top tip for simplifying your record-keeping is to organise your records as you go.
Of course, this doesn’t mean dealing with your finances every day – that’s what we’re here for. But it is smart to set aside time every week, two weeks, or monthly to go through your records and ensure everything’s up to scratch.
Make sure you’re regularly uploading invoices and receipts, and sending any necessary financial documents to our team. We’ll record a lot of your cash flow data automatically, as we connect our systems to your bank feeds for real-time record keeping. You’ll simply need to send us any invoices or receipts we don’t have, and we’ll do the rest.
Categorise Your Expenses
Accurate categorisation is a smart way to organise your expenses. Not only will this help you submit accurate tax returns, but it’ll also give you a far better understanding of where your business is spending money.
If you have a business bank account, you might be able to assign categories for transactions as you go. These are usually sorted into groups like ‘travel’, ‘utilities’, and ‘personal’, and make it far easier for both our team and HMRC to understand your bank statements.
We’ll then keep records of your tax-deductible expenses, with the right categories ready to go. We’ll also use these when creating your financial reports to give you a clear picture of exactly how your business is performing.
Reconcile Your Books
Reconciliation simply means checking that the records in your bookkeeping software match the transactions in your bank accounts. This process helps you identify any mistakes, such as duplicate entries, missing payments, or incorrect figures.
As part of our bookkeeping services, we’ll reconcile your books on your behalf. As one of the most time-consuming and detail-oriented tasks, it’s a great one to take off your shoulders! By not having to worry about balancing your books, you’ll have more time to focus on running your business and all the tasks you actually want to do.
Invest in Bookkeeping Services
The #1 tip for simplifying your record keeping? Invest in professional bookkeeping services. With a team like ours by your side, you’ll have the peace of mind that:
- Your records are accurate
- Your books are kept up to date throughout the year
- You won’t miss important deadlines or fall behind on compliance
- You’re ready for the MTD for ITSA changes
- You can easily access reports that show how your business is performing
We take the pressure out of record keeping for streamlined financial reporting that’s compliant with the latest HMRC rules.
Contact Our Bookkeepers in Sussex
Interested in our bookkeeping services? From the tasks we perform to no obligation quotes, we’re always happy to chat more about how our team can help your business.