It's never too late to start a good record keeping system for your business. It's an important part of being a small business owner, keeping good records of your transactions and tax invoices will help you monitor the performance of your business as well as comply with your tax obligations.

  Benefits of record keeping

While it can be tedious, there are many benefits to keeping good records.

It can help you to:

  The legal requirements for keeping business records

By law your records must:

You can incur penalties if you do not keep the right tax records.

  Storing records electronically

You're able to store your records electronically, but you must make sure they are:

The records must also be on a computer or device that:

  The tax records you have to keep

You will need to keep records to help you prepare your business activity statement (BAS), and annual income tax return. Depending on your tax obligations you may need to keep other records as well.  If you have any concerns or questions please feel free to contact our office for more information.

Here's a list of some of the tax   records that small business owners have to keep:

  Income and sales records

Records of all income and sales transactions, including tax invoices, receipts books, cash register tapes and records of cash sales

  Expenses or purchase records

Records of all business expenses, including cash purchases.  Records could include receipts, tax invoices, cheque book receipts, credit card vouchers and diaries to record small cash expenses.  If you bought something for your business, but sometimes use it for private use, you also need to keep records showing how you worked out how much of its use is private.

  Year-end records

These may include lists of creditors (people you owe money to) or debtors (people that owe you money). It also includes expenses you incur buying, maintaining, repairing and selling business assets or stock. You should keep worksheets to calculate the decreasing value of your assets (also called 'depreciating assets'), stocktake sheets and capital gains tax records.

  Bank records

Your banking records can include things like deposit slips, cheque butts or payment records, bank and credit card statements, and loan or lease agreements.

Your business and personal expenses should be kept separate. Separate business bank accounts are mandatory for partnerships, companies and trusts. If you're a sole trader, a separate business bank account can also make your records easier to manage.

  Goods and services tax (GST) records

If you are registered for GST, keep all tax invoices from your suppliers, which will help you claim GST credits. You must keep any other document that records adjustments, or a calculation made for GST purposes. You report GST amounts and claim GST credits for purchases on your business activity statements (BAS).

  Fuel tax records

To claim fuel tax credits for your business, your records must show you:

  Employee and contractor records

If you have workers, you will need to keep records of any:

Your tax and super obligations will change depending on whether your worker is an employee or a contractor, so it's important you determine what your worker is.

If you would like to know more information in relation to record keeping and substantiation, call us today on 03 55851 522 or call into one of our offices.