All businesses in Australia are legally required to keep certain records for tax, superannuation and business compliance purposes so make sure you understand what the legal requirements are for your business.
When you have the right systems in place to manage your business records, it helps you stay organised, work smarter and save time and money (and who doesn’t love that).
From day one, it is important to start recording all your income and expenses for your business.
Whether you choose a manual system (paper-based) or use accounting software, your records should be accurate, easy to understand and readily accessible when needed.
Keeping good records not only helps at tax time, it also gives you a clearer picture of how your business is tracking.
To help with tracking, you may want to set up an invoicing system.
These are efficient and often cloud-based, allowing you to manage your records from anywhere.
Popular options include
Cashflow Manager
Hnry
MYOB
QuickBooks
Reckon One
Xero
Questions to ask yourself
Before you decide, ask yourself some questions before investing in software so it does what you need it to do and saves you time money and stress.
Does it integrate with my bank account?
Is it compatible with Single Touch Payroll (STP) if I employ staff?
Can it generate Business Activity Statements (BAS) and tax reports?
Can it do project and job costing?
Does it do invoicing?
Does it prepare cash flow reports?
Does it integrate with other systems such as Point of Sale (POS) and Customer Relationship Management (CRM) that you use?
Useful information
All transactions that relate to your tax and superannuation.
All registration details such as for a business name, Australian Business Number (ABN), licences and permits (if required) and anything else you need to register for.
All income and sales transactions.
All business expenses, including cash purchases.
End-of-year records, including lists of creditors (people you owe money to) or debtors (people that owe you money).
Records of all expenses related to your assets or stock.
Bank records.
Goods and services tax (GST) records (if you have registered for GST).
Fuel tax credit records (if you’re claiming fuel tax credits).
Employee and contractor records.
The ATO recommends that where possible you should keep digital records.
Some of the benefits of this include:
taking up less physical space
can be stored off site or in cloud storage
less risk of damage or loss
once you have created your system it is much easier to manage, update, search and maintain
Your records must be in English or able to be translated easily into English.
Check the record-keeping rules of all organisations that you deal with.
Most business records (including for a sole trader) should be kept for a minimum of five years. Company records and some employee records need to be kept for seven years.
