It’s not a trick question!

And it’s not really about the difference between a receipt and an invoice (although we have lots to say about that too!)

If you’re in business and you have encountered a bookkeeper or accountant, chances are, you’ve been asked for the paperwork. And in fact paperwork isn’t really paperwork anymore either, thanks to digital filing of paperwork on accounts software.

What is all the fuss? Why this constant looking for paperwork?

It’s not really just about the paperwork – and your finance professional is really and truly not indulging a secret love of nagging you. It’s about proof. It’s about evidence and security. It’s an important, grass roots financial control. And it’s also money in your pocket.

Bold claims! – but here is why.

That piece of paper proves you had a legitimate business expense. That piece of paper proves that you didn’t spend £500 at John Lewis on cushions for your house, but on a piece of new equipment for your office. A piece of equipment you can now capitalize and for which you can claim capital allowances.

That means money off your Corporation Tax bill.

And then there’s the VAT. Without a proper VAT document, you cannot recover the VAT. So for every transaction that doesn’t have that supporting document, you have potentially overpaid your VAT return by 1/6th.

And savings aren’t just to be found in your VAT return.

Here are some actual examples from our client experiences.

A new client had several monthly direct debits to their phone provider. We reviewed the provision to prove these were legitimate business expenses. We found that for 6 YEARS, that client had been paying the domestic landline charges for an individual over 400 miles away. They took steps to recover the money - worth £6,000.
A client used their credit card to manage most of their monthly expenditure. We looked for receipts to support the expenditure – and found fraudulent transactions totaling over £3,000. £2,000 of that was one transaction alone.

Fail to provide receipts and suffer the consequences.

If you’re self-employed, you’ll include details of your expenses on your tax return to reduce your tax liability. HMRC do selectively review – and they will require sight of your receipts.

If you’re a company director, it’s a requirement of your position that you keep appropriate records. Fail to do this and you risk disqualification and a fine of £3,000.

Safe and Sound

At Accountability, we provide our clients with free access to Receipt Bank – and deliver training to make sure that we make this whole process as easy and straight forward as possible. We want to do away with the nagging – and make sure you keep your accounts safe and secure.