Every business has a legal obligation to keep records of their transactions. There is no set format that must be adhered to but at the very least records of all sales, expenses and purchases should be kept.
Keeping good records is an essential part of running a successful business. When good records are kept the business owner knows at any given time, how much is owed from customers, how much is owed to suppliers, how profitable the business is and how much cash is available. This means better decision making can be made and improvements in cash flow and profitability can be made if necessary.
The preparation of your annual accounts and other business reports depends on accurate and timely bookkeeping.