Supporting Guidance: business records checks: at the visit: cash handling and bank and credit card statements
Some businesses, such as market traders and fish and chip shops, receive most of their business receipts in cash.
Therefore you need to pay special attention to the customer’s record-keeping process to establish whether the method the customer uses includes all receipts.
It may be that some cash receipts have been spent during the day, for example as petty cash or to buy stock. In these cases, the records will still be adequate providing the customer records:
- total gross receipts, and has separate records of the business expenses, or
- net receipts but has a process for adding back all the amounts expended.
Bank and credit card statements
Many businesses will use a bank account and/or credit card account. The statements for these may be an integral part of the record-keeping system. You should check the extent to which these form part of the statutory records.
While some businesses will have separate business bank accounts, in others business receipts and payments (expenditure) may pass through the customer’s personal bank account. Personal credit cards may also be used to pay business expenditure later reimbursed by the business. Where this is the case the personal account or accounts may also become part of the statutory records.