A sale transaction is made when your customers agreed to buy your products and services.
Your sale transaction must be recorded and included in your company account. Let start with your sale invoice to be sent to your customers. There are some of the basic records you need to maintain for your limited company.
Every time you make a sale, you should produce an invoice or receipt, even if you are selling for cash. Your sale Invoice should be in sequential number and filed accordingly and be kept for a couple of years.
You must then transfer the information from the sale invoice to your accounting system. The following information should be recorded for every sale transaction you made for accounting purposes.
- Date of the invoice,
- The name of the customer.
- The invoice reference number.
- Amount of the sale, including VAT
- The amount of the VAT element
- The amount of the sale excluding VAT, net sale.
You do not have to breakdown your sale amounts into the VAT element and net amount if your company is not VAT registered.
The date of payments received from your customers and method of payments whether by cash or bank transfer or by cheque must also be recorded.
Companies giving credit to their customers, it may be wise to maintain a list of customers that have not yet paid and use this list as a checklist to ensure you are collecting from monies your customers when the invoice fall due.
Getting your accounting books and records right from the beginning is crucial to avoid spending considerable time to correct the data at the financial year end. You would save money on accountancy fee by keeping your record properly. Your accountants would be able to extract the data from your record to prepare your company accounts swiftly.
Messy accounting records would cost you more in accountancy fee if your accountant has to sort it out for you.