Question 1

What records must a business keep, and for how long?

Accepted Answer

Enough to support every figure in your accounts and tax returns, kept for a **statutory minimum period** that varies by record type and jurisdiction — and the burden of proof is on you, not on the authority.

**What must generally be kept:**

**Sales and income** — invoices, receipts, till records, platform statements.

**Purchases and expenses**, with the original evidence. A bank statement showing a payment is **not sufficient evidence of a deductible expense**; you need the invoice or receipt showing what was bought.

**Bank statements** for all business accounts.

**VAT records** where registered, including a VAT account reconciling what was charged and reclaimed.

**Payroll records** — pay, deductions, pension contributions, employee details, right-to-work evidence.

**Assets**, including purchase records for anything capitalised.

**Stock records** where relevant.

**Statutory company records** — registers of members, directors and persons with significant control, minutes and resolutions.

**Typical retention periods**, which differ by country: broadly around six years from the end of the relevant accounting period for company tax records, and a shorter period for sole traders in some systems, with longer periods for payroll, pensions and anything under investigation. **Where a return is late or under enquiry, keep everything until resolved.**

**Digital is acceptable** in most jurisdictions, provided records are complete, legible and retrievable — and in several, digital record-keeping is now mandatory for tax. Photographing receipts and discarding paper is generally fine, with the caveat that the images must be readable and backed up.

**Data protection cuts the other way.** Personal data should not be kept longer than necessary, so "keep everything forever" is not a safe policy for customer and employee records. Set a retention schedule that satisfies both obligations.

**What good practice looks like:** capture receipts at the point of spending rather than in a shoebox; reconcile monthly rather than annually; keep a documented retention policy; and back up to somewhere the business controls, since losing records does not remove the obligation.

General information, not tax or legal advice; periods vary by country.

Question 2

What do the three financial statements actually tell you?

Accepted Answer

Each answers a different question, and reading any one alone gives a misleading picture — which is exactly why there are three. The profit and loss account (income statement). Did we make money over

Question 3

What are management accounts, and how are they different from statutory accounts?

Accepted Answer

Statutory accounts are prepared to a legal standard, once a year, for filing and for tax. Management accounts are prepared for you, as often as you need them, in whatever form actually helps you

Question 4

What is the difference between cash and accrual accounting?

Accepted Answer

When a transaction is recorded. Cash accounting records it when money moves; accrual accounting records it when the economic event happens, regardless of payment. Cash basis. Income is recorded when

Question 5

How do you buy an existing business, and what should you check?

Accepted Answer

Through a structured process — identify, value, offer subject to due diligence, investigate, negotiate, complete — and the investigation stage is where the real work is, because what you are buying

Question 6

What information about my company is public at Companies House?

Accepted Answer

Considerably more than most people expect, and it is free for anyone to search — competitors, customers, journalists and members of the public included. What is always public: Company name, number,

Question 7

Why do you need a separate business bank account?

Accepted Answer

For limited companies it is effectively a necessity because the company's money is legally not yours. For sole traders it is not usually a legal requirement and is still the single highest-return

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