This document discusses the importance of keeping financial and physical records for businesses. It covers why businesses need to keep records, including legal requirements, management efficiency, monitoring performance, and aiding decision making. The document also outlines the different types of records that should be kept, such as financial records like expenses, taxes, invoices and payroll, as well as physical records like purchase orders, licenses and permits. Effective record keeping systems and the advantages of accurate records are also summarized.

2. Learning outcomes
learners will: -
 Understand why businesses have to keep records
 Be aware of the different types of records
 Be aware of the different record formats

3. L3 - Understand how to use financial
and physical record keeping systems
 P9 - review financial records for a selected business
 P10 - examine physical records for a selected land-
based business
 P11 - examine the use of financial and physical records
in monitoring business performance and progress.
 M4 - discuss the use and purpose of physical and
financial records, including how they may be used to
monitor business performance and progress.

4. Why do businesses have to keep records?
 Working in pairs think about the why businesses
have to keep records.
You have 10 mins to brainstorm this and then feedback
to the class

5. Why do businesses have to keep records?
 Legal requirements
 Management efficiency
 Monitor business performance & progress
 Aid decision making

6. Legal requirements
 Meet legislative and regulatory requirements
including archival, audit and oversight activities
 The law says that everyone who pays tax must keep the
records required to fill in a tax return….this will
illustrate what you have earned and spent
 VAT registered businesses are legally required certain
types of business records

7. Management efficiency
 Conduct business in an orderly, efficient &
accountable manner
 Deliver products/services/customer care in a
consistent and equitable manner
 Provide consistency, continuity and productivity in
management and administration

8. Monitor business performance &
progress
 Facilitate the effective performance of activities

9. Aid decision making
 Look at past, current and future data (relating to
production, sales, customers, suppliers,
employees……..)

10. What records should be kept?
Continuing to work in pairs list the different types of
records that should be kept under the headings;
Financial records
Physical records
You have 10 mins to work on this and then will be
required to feedback to the class

11. What records should be kept?
FINANCIAL RECORDS
 Business expenses vehicle use log
 Credit card statement cash register tapes
 Annual tax returns credit card sales receipts
 Quarterly tax filings Invoices
 Payroll cancelled checks
 Inventory check stubs
 Sales
 Petty cash

12. What records should be kept?
OTHER RECORDS
 Purchase orders Licenses
 Employment applications trademark regs &
patents
 Emails and other business communications
 Inventory logs
 Personnel records
 Accident reports
 Articles of incorporation
 Permits

13. Computer based records
 You can transfer details from paper records onto a
computer, but usually have to keep original.
 Don’t have to print everything out, but must make sure
original can be recovered from a computer
Computer packages:
Microsoft Word, Excel, Access, Sage

14. Advantages of keeping accurate
records
 Helps you avoid paying too much tax
 Avoids interest and penalties by paying right amount
of tax at the right time
 Gives you the info needed to manage your business
and help it grow
 Makes it easier to get a loan
 Helps you budget for tax payments
 Helps hmrc to check your tax position accurately
 Could help to reduce accountant fees
 May support claims to reliefs/capital allowances

15. Steps to effective record keeping;
1. Set up a system – this can be either paper
based/computerised to keep information together
2. Keep records throughout the year – keep all records
and update regularly.
3. Keep records for as long as required –
(6 years for VAT/5 years from the latest day for filing
your self assessment

16. Things to consider ….
 Privacy / confidentiality
 Data protection