Business income falls into two categories for profit and loss reporting:
For information on the second category, see the page in this guide on business income: other.
Your business' total sales of products and/or services in a trading year is referred to as turnover. This is the starting point for your profit and loss account.
How you record sales will vary according to your business type, size and whether you are VAT-registered. You may use a simple list or 'ledger' in a book, a tailored spreadsheet, or a computer software program. Whichever system you use, you need to ensure that it is accurate and updated regularly.
The back-up records for your sales ledger fall into two categories, and will vary according to your business type:
Proof of income relating to the above:
If you operate on a 'cash only' basis you must keep detailed records of your income in your sales book or ledger and be able to relate these to your expenditure, cash in hand and bank statements.
HM Revenue & Customs