Any small to medium enterprise (SME) must ensure that its paper records are kept in an orderly manner. Sometimes this can prove to be a headache, so an efficient filling and paper management system is essential.
Why are paper records important?
Despite the digital revolution, the law still requires that hard copies of receipts and invoices and other business documents be retained for tax purposes.
The tax office (HMRC) actually states on its website that:
“You may have to pay a penalty if you don’t keep records or if you don’t keep your records for long enough.”
Computers can be hacked or data may be lost so paper records are the best type of evidence to back up a tax return. Many companies find that the easiest way to keep these documents is to use storage boxes that can be accessed easily when needed.
Devise a storage system
It’s no use just piling papers in a haphazard way into the box and hoping that you’ll remember their relevance when you need them. At the start of the new tax year, devise an efficient filing system and then make sure that all members of staff understand the importance of labelling the papers correctly and filing them in a logical fashion.
You could also keep a log of the papers that cross-references with the documents in the storage box.
Destroy old and unnecessary documents
Different documents have different storage time schedules. For example, insurance papers, Companies House Incorporation certificates and employers’ liability certificates should be retained for the life of the business. When it comes down to the different HMRC legal requirements, you should visit their website or talk to your tax advisor to see how long you need to hang on to bank statements, evidence of employees pay and other business essentials.
When in doubt, it’s always better to check with the authorities.
Making documents accessible for an SME
The most important factor to bear in mind is that you don’t want to waste time trying to track down vital business papers. Time is always valuable, and therefore, a simple storage system will make life run more smoothly for your SME.