Limited company bookkeeping · UK guide · 2026
Bookkeeping for limited companies: records, software, and monthly close.
Written by Iftikhar Rashid FCCA — 16 years in practice.
What limited company bookkeeping involves
Limited company bookkeeping means recording every transaction accurately, reconciling the bank monthly, categorising income and expenses correctly, and maintaining the records required by Companies Act 2006 and HMRC. For companies using Compliance Vault™, bookkeeping is maintained to monthly close standard by the 7th — producing reliable management accounts and a stress-free year-end.
What records a limited company must keep
Revenue and sales
All invoices raised, dates, amounts, VAT if applicable, customer details
Purchases and expenses
All supplier invoices, receipts, bank charges, credit card statements
Payroll records
Payslips, RTI submissions, P60s, P11Ds (if applicable), employer pension records
Bank statements
All accounts — current, savings, loan. Reconciled against accounting records monthly
Director loan account
All transactions between directors and the company not classified as salary or dividends
Dividend records
Board minutes authorising dividends, dividend vouchers showing amount per share
Fixed assets register
Capital equipment purchased — cost, date, depreciation, capital allowances claimed
VAT records
Output VAT on sales, input VAT on purchases, quarterly returns submitted
FAQs
What records must a UK limited company keep?
Companies Act 2006 requires limited companies to keep adequate accounting records. This includes: all money received and spent, assets owned by the company, liabilities owed, stock held at year-end, and all transactions involving directors and shareholders. Records must be kept for at least 6 years. HMRC additionally requires records supporting the CT600 for 6 years after the accounting period. [VERIFY: current Companies Act requirements at gov.uk]
What software should a limited company use for bookkeeping?
Most UK accountants recommend Xero, QuickBooks, or FreeAgent for limited company bookkeeping. All three are MTD-compatible for VAT, integrate with bank feeds, and produce management accounts from the same data. Xero is typically preferred for growing companies. The choice depends on complexity and what your accountant supports.
What is a chart of accounts?
A chart of accounts is the categorised list of all account codes used to classify transactions in a company's bookkeeping system. A standard limited company chart of accounts includes: revenue categories, cost of sales, overheads by type, fixed assets, current assets, liabilities, and equity. Setting up the right chart from the start makes year-end preparation and management accounts more useful.
How often should a limited company reconcile its accounts?
Monthly is the standard for any company receiving Compliance Vault™ Portfolio Reporting Pack. Reconciliation means matching every transaction in the accounting software against the bank statement. Unreconciled accounts at year-end take significantly more time to correct — and mean management accounts throughout the year are unreliable.
What is the consequence of poor bookkeeping for a limited company?
Poor bookkeeping leads to: inaccurate management accounts (decisions made on wrong numbers), a larger year-end accountancy fee (more time to reconstruct records), increased HMRC enquiry risk (unexplained transactions, missing evidence), potential Companies Act penalties for failure to keep adequate records, and personal liability risk for directors who cannot demonstrate proper financial oversight.
We handle the bookkeeping for you.
Monthly close by the 7th. Bank reconciled. Management accounts ready. All part of Compliance Vault™.
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