This is a question that I, as an accountant, find incredible when I am occasionally asked. Why would any busy business owner think there would be a need for more than one set of records? There is barely time to keep one set, let alone more. The only time I have found two serious sets of books was when fraud was involved and a grim determination by the businessman to pay as little tax as possible. No, he didn’t escape prison – 2 years in fact.
Sometimes the question is born out of a huge distrust of computers and computer based bookkeeping packages. There is more than a little reluctance to rely on the machine – just in case it breaks down, or accidentally wipes all data off it’s hard drive – so should we keep a hand written set of books “just in case?” The answer is no. Just make sure you have a disaster recovery procedure – and check your backups regularly just in case they cannot be restored when you really need them.
Sometimes the question is genuine as the questioner heard somewhere, usually the pub, that as VAT on some expenses cannot be reclaimed, that these need keeping in a different set of books. Likewise, entertaining and other expenses which are not tax deductible should be kept separately from other expenditure which is tax deductible. The answer again is no. One set of records is all that is needed and let your accountant worry about what is tax allowable and what isn’t when he prepares your annual accounts.
I advise anyone who asks this question to focus on keeping the most up to date, detailed books they can – just the one set! – or let someone like me deal with it for them for a monthly fee.
Please do not hesitate to contact me if you would like to know more about our bookkeeping bureau service.