Archiving invoices is a legal obligation for companies, but also a necessity to ensure the efficient and secure management of accounting documents. Whether in paper or electronic format, archiving invoices allows not only to respect the legal rules but also to facilitate administrative work and transaction management with your patrons and vendors. In this article, we are going to explore the various methods of archiving, the obligations to be respected, and the best practices for archiving your electronic and paper invoices in an efficient way.
Why is archiving invoices essential for a business?
Archiving invoices is a crucial act for any business. Invoices issued and received, whether they concern purchases or sales, are essential accounting documents for the proper maintenance of a company's accounts. These documents can be requested in several situations:
- Tax control: The tax administration (HMRC) may ask for supporting documents to verify your tax returns, and invoices are the necessary proofs to demonstrate the regularity of your transactions.
- Complaints: In the event of a dispute with a vendor or a customer, the invoice becomes a key document to resolve disputes.
- Accounting follow-up: The invoices allow you to track your cash inflows and outflows and to ensure the proper management of the bookkeeping.
What is the retention period for invoices?
In the UK, the legal shelf life for invoices varies according to the nature of the document. Invoices must be kept for a minimum of 6 years (limitation period), but some may have to be kept longer.
- Purchase and sales invoices: In accordance with the Companies Act 2006 and HMRC guidelines, both purchase and sales invoices should be kept for 6 years from the end of the accounting period in which the transaction took place.
- Tax documents: Documents related to taxes and tax returns, such as invoices issued or received for the provision of services or sales, should be kept for 6 years.
- Electronic invoices: If you receive or issue invoices in electronic format, they must be kept for 6 years in a format that guarantees their integrity.
How to archive invoices: the methods to adopt
The archiving of electronic and paper invoices is based on a few essential principles, namely security, integrity, and accessibility of documents.
- Archiving of paper invoices
For paper invoices, it is recommended to keep them in optimal conditions to avoid deterioration (humidity, dust, etc.). Use binders or folders to organize the invoices by date or document type, and store them in a secure location.
- Electronic invoice archiving
Electronic archiving offers significant benefits, including reduced storage space and the accessibility of your documents at any time. Electronic invoices, transmitted by internet or email, can be archived in digital storage systems adapted to legal requirements. Here are the key points for optimal management of electronic invoices:
- Digitizing invoices: If you receive paper invoices, it is recommended to digitize invoices to integrate them into a digital archiving system.
- PDF format: Electronic invoices should be recorded in standard formats such as PDF, guaranteeing their readability and their integrity.
- Electronic archiving system: Use a secure electronic archiving system that allows you to easily store, organize, and find your invoices. This system should ensure data security, protecting documents from unauthorized changes.
- Compliance with regulations: According to UK regulations for keeping invoices, archiving must guarantee the integrity of invoices throughout the retention period.
Invoice archiving and legal compliance
Archiving invoices must respect some legal obligations, especially for businesses subject to strict accounting and fiscal rules. Here are a few things to keep in mind:
- Compliance with HMRC regulations: Businesses should respect regulations regarding the preservation of invoices to comply with tax provisions and avoid sanctions.
- Ensuring the integrity of invoices: For electronic invoices, it is imperative to ensure that the documents are authentic and that they have not been altered. Archiving solutions should offer mechanisms to ensure this integrity (e.g. timestamps, electronic signatures).
- Retention period of documents: Ensure that legal deadlines for retention are respected. After the retention period, documents should be securely destroyed to avoid data breaches.
Setting up an archiving system
Setting up an invoice archiving system in your business is essential to organize the management of accounting documents and meet retention deadlines. This system can be composed of several elements:
- Electronic archiving software: Numerous digital solutions offer secure storage for your electronic invoices, allowing you to organize them by date, supplier, invoice number, etc.
- Secure cloud: Online storage allows you to access your documents at any time and protect them against physical risks (fire, theft, etc.). However, it is important to choose a storage service provider in compliance with safety standards and applicable regulations (in particular GDPR).
Invoice archiving in the context of a business: best practices
- Systematization of the archiving process: It is essential to establish a clear and systematic process for archiving invoices as soon as they are received or sent. This process should be documented and integrated into the daily management of accounting documents.
- Team training: Make your teams aware of the importance of invoice archiving and train them to use the archiving system.
- Regular audit: Set up regular audits to verify that your archiving procedures comply with legal requirements and function properly.
Invoice archiving, a key element of administrative management
In conclusion, archiving invoices is a fundamental element in the accounting and administrative management of a company. Whether in paper or electronic form, it is essential to retain your invoices in a secure system that respects the legal deadlines for the preservation of documents. Electronic archiving offers numerous advantages, but it must be implemented thoughtfully to ensure security and data integrity. By respecting these principles, you will not only ensure the legal compliance of your business, but you will also facilitate the management of your documents on a daily basis.
