Limited company bookkeeping has extra responsibilities because the company is a separate legal entity. Directors need clean records for Corporation Tax, Companies House filings, dividends, payroll and year-end accounts.
Keep company and personal money separate
Company money belongs to the company. Mixing personal and business spending creates extra bookkeeping work and can affect director loan account records.
- Use a dedicated business bank account
- Avoid personal spending from the company card
- Record director repayments clearly
Reconcile bank accounts monthly
Monthly reconciliation keeps invoices, bills, tax payments and transfers accurate. It also makes year end easier for your accountant.
- Business current account
- Savings and tax accounts
- Credit cards and finance accounts
Record invoices and supplier bills
Keep sales and purchase records complete. This is especially important for VAT registered companies and companies with trade credit.
- Sales invoices and credit notes
- Supplier invoices
- Receipts for card payments
Track payroll, dividends and director loans
Director payments need careful records. Salary, dividends, expenses and loans are different things and should not be muddled.
- Payroll journals
- Dividend vouchers and minutes
- Director loan account movements
Prepare for year end
Your accountant will need clean bookkeeping, supporting documents and explanations for unusual balances.
- Review debtors and creditors
- Check asset purchases
- Confirm loans and HP agreements
Key takeaway
Limited company bookkeeping is about keeping the company’s records clean and separate from the director’s personal finances.
