Record keeping for small business owners.

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  • December 5, 2016

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 and to ensure you’re meeting 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:
– keep track of your business’ health, so you’re able to make sound business decisions
– prepare your tax return more easily
– manage your cash flow
– demonstrate your financial position to banks or other lenders.
The legal requirements for keeping business records. By law you must keep business records:
– for a minimum of five years or longer after the record is created, updated or the transaction is completed (whichever is most recent)
in English or in a form the Australian Taxation Office (ATO) can understand.
Storing records electronically: You’re able to store your records electronically, but you must make sure they are:
– a true and clear copy of the original
– kept for five years
– able to be reviewed by the ATO at any time.
The records must also be on a computer or device that:
– you have access to (including all passwords)
is backed up in case of computer failure
– allows you to control the information that is processed, entered and sent.
– 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.
Here’s a list of some of the tax records that small business owners have to keep:
income tax and GST
sales records
purchase/expense records
year-end income tax records
banking records
payments to employees and contractors
PAYG withholding for business payments
fuel tax credits.
What to do:
– Visit the ATO’s website for detailed information on record keeping for small business owners.
– Use the ATO’s Record keeping evaluation tool to find more specific information about the records your business has to keep.
– Check out our information on setting up a basic bookkeeping system

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