It is a basic principle of accounting that any transaction is supported by evidence. A business raises invoices to customers and in turn receives invoices from its suppliers. If you pop into Sainsbury's for a jar of coffee you get presented with a till receipt. It’s all evidence. The document gives you lots of information which can help you analyse how your business is progressing (or not!). It also enables you to track the transaction detail, when you bought something, how much it cost, how much profit you made. Clever reporting can bring together a lot of information just from that basic piece of paper.
And thanks to modern technology you don’t have to file volumes of paper. A substantial number of companies send invoices by email so they can be quickly filed electronically and of course if you buy online the record is held in your account. Even your coffee receipt from Sainsbury's can be scanned or photographed on your Smartphone and entered straight into your accounting software.
The digital move
From April 2019 VAT returns will have to be submitted to HMRC using digital software, you will no longer be able to log into your Gateway account and manually enter the figures. It will also incidentally need to be filed within one month of the end of the VAT quarter in line with other MTD proposals. That additional seven days will have gone. The returns will, as now, not be required to include any detail of the transactions but HMRC stress that there will be a requirement for businesses to keep the underlying records in digital format. And that digital format starts with that little bit of paper whether it’s real or virtual. And if you should ever be unlucky enough to be the subject of an HMRC investigation then those basic records are very important.
Receipts go way back
As far as has been established the first recorded name in history belongs to a guy called Kushim, that’s his signature on the tablet above. The tablet dates back to around 5000BC and says simply ‘29,086 measures barley 37 months Kushim’ The most probable translation is ‘A total of 29,086 measures of barley were received over the course of 37 months. Signed, Kushim.’ Far from being a famous king or warrior the first recorded name belongs to an accountant, I always knew accountants could be famous. So make sure you keep that receipt, you could go down in history.
For more information on CS Accounting: