What types of records does a business need?

The business needs 4 main types of records

·Prime Documents.

Invoices – Sales and purchase

Credit Notes – Sales and purchase

Bank paying in slips and cheque book stubs

Bank Statements

Books of Prime entry.

Cash Books

Accounting Journals

Day Books


Double entry bookkeeping.

o Sales Ledger

o Purchase Ledger

o Fixed asset register

o Cash Books


Trial Balance, Profit and Loss Account and Balance Sheet.

o Trial Balance

o Profit and loss account

o Balance sheet


The table below illustrates the records

Users of accounting information

Below is a chart showing the People and organisations who might want to use the information from accounting records that we produce.


They have invested in the business they may be running the business or have staff running the business but they will want to know the financial status of the business and the profitability (some of the areas they may wish to consider are in the diagram below).


Customers especially when the business is quoting or tendering for a large contract may seek to assure themselves the business is in a sound financial state to supply the terms of the proposed contract.


Especially when the business wants supplying on credit terms may wish to establish that the business is able to meet its financial obligations


Financial information is not always made available to employees and employee representatives (such as trade unions) but if rumours of financial problems are circulating and morale is low then they may be used to provide reassurance the business is sustainable and not likely to fall into financial problems putting jobs at risk, also some organisations have a policy to be open with their employees.


Creditors (people to whom the company owe money) or indeed potential creditors may wish to reassure themselves the debt is likely to be repaid the most common of these is the banks.


Tax is due on profits and VAT is due on sales of a business and during an enquiry HMRC will want to see the accounting records of a business.


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