Why record-keeping is important
It is essential that you keep very good records of all your business transactions. This is important for several reasons:
- you're required by law to keep poultry movement records if your flock consists of 250 birds or more. Your local trading standards department will be able to tell you which records you need to keep and how long you need to keep them for. For laying flocks, you'll also need to keep mortality records
- HM Revenue & Customs (HMRC) requires you to keep certain records for inspection for six years and may check your records from time to time as part of their compliance procedures. There is an HMRC guide to business record keeping for the self-employed on the Gov.uk website. The guide explains which records you have to keep, how long you have to keep them, and what to do if they get lost or destroyed
- if HMRC decides to investigate the business it will be of real assistance to your accountant if you have kept good records
- you need to know how the business is doing at any time - well kept records will tell you
- you will have to keep good records of your trade customers
- to enable you to run your farm efficiently, you will need to keep management records of feeding schedules, vaccinations, mortality and so on
- you are likely to have to keep certain records to comply with organic production standards or with a farm assurance scheme
Make sure that you note down all income the business receives, and all the money that is spent, even if it is only small amounts. You should be able to show from your records how all income received by the business can be traced through until it is either spent or banked.
If you take produce from the business for your own personal then you should keep a record of when you do this so that you can balance your books.
Your accountant will be able to give you advice on how best to keep records. You might decide to go for a computerised system which will help your accountant at the end of the year to draw up your accounts.