Old receipts cluttering up drawers? Payslips from 1999 tucked inside paperbacks? Sounds familiar, right?
And, yes, these are scenarios that give accountants nightmares.
They know the importance of maintaining an organised and transparent paper trail of financial records – both personally and in business.
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Payslips
Whether you receive these as physical copies or electronically, it’s vital to file them properly and for as long as possible.
They are the most concise personal record of everything from tax contributions and codes to student loan repayments, holiday entitlements, National Insurance contributions and net pay received.
They’re often required as proof of income when renting a home or applying for a mortgage, obtaining credit or making overseas visa applications.
Bank Statements
Remember the days when you had to rummage through boxes to find a statement?
Thankfully, most are now electronic and file themselves nice and neatly in their digital domicile.
If you do receive paper copies, keep them for at least a year until you receive an annual summary of activity from your bank.
Accountants also advise keeping them in a secure location, such as a locked drawer.
Anything from HMRC
If it’s labelled HMRC, it’s red hot important! Her Majesty sends a variety of vital documents relating to employment and finances every year, including P60 forms, P45s and P11Ds.
It’s worth holding on to these for as long as possible, as they’re needed when changing jobs or applying for tax rebates. So think like an accountant and employ good financial housekeeping.
Confirmation Documents
There’s rarely a greater feeling than paying off a debt, however small. While it’s tempting to think debts are done and dusted once paid, keeping hold of the proof makes sense. Admin errors do occur and it’s not uncommon to be chased for money you’ve already paid. Save yourself that hassle!
Receipts
While you probably don’t need to hold on to that receipt for a packet of tattie scones, you should always be in the habit of retaining receipts for significant purchases. If you pay by credit or debit card, this is a particularly shrewd move – matching up transactions ensures your accounts are in good health.
For the self-employed, holding on to every receipt, particularly VAT receipts, is vital. You’ll need them when submitting tax returns and your accountant will love you for it!
With a little organisation, keeping financial records up-to-date need not be taxing. And if all of that diligence inspires you, why not check out the latest Accountancy vacancies on s1jobs?