Businesses that fail to keep accurate records may struggle to remain compliant at tax time and incur financial penalties from the ATO.
Follow the ATO’s record keeping guidelines to stay organised.
Basic organisation tips:
- Keep records electronically (if possible)
- Keep evidence of all transactions
- Take photos of paper receipts to avoid faded records
- Keep all business records including income, expenses and bank records- you generally need to keep them for five years
- Keep your business records separate from your personal records
- Make sure business records include cash, online, EFTPOS, bank statements, credit and debit card transactions
- Records should be kept of sales and other business income and business expenses which can be claimed as a deduction
- Keep records showing when you use business purchases for private purposes, which will help you work out the business portion you can claim as a deduction
- Use the ATO record keeping evaluation tool to review your record-keeping practices from time to time and see if you’re still on the right track