(or why you should move to one who does)
Its Records and Information Management Month and many small business owners are not aware of the rules, regulations and requirements when it comes to keeping business records. Just assume you need to keep EVERYTHING! To summarise – no paperwork means no tax deduction
The ATO says:
You are legally required to keep records of all transactions relating to your tax and superannuation affairs as you start, run, sell, change or close your business.
There can be legal and financial consequences if your business doesn’t comply with these record-keeping requirements.
Record keeping is an essential part of running your business. It makes good business sense too. Keeping good records helps you:
– know how your business is going
– keep track of your income and expenses
– show banks or lenders how your business is going
– make the best use of your registered tax or BAS agent.
Records you need to keep include:
– receipts and other evidence of all sales and purchases you made for your business
– tax invoices, wage and salary records
– all documents about GST
– records of the purchase, sale and other costs of any business assets, such as land, buildings or office equipment
– all records relating to tax returns, activity statements, fringe benefits tax (FBT) returns, and contributions to employee super.
You must keep your business records for at least five years.
They mean 5 years after you lodge your tax return, so 6 years in effect. All the details can be found here: https://www.ato.gov.au/individuals/income-and-deductions/in-detail/keeping-your-tax-records/
https://www.ato.gov.au/business/record-keeping-for-business/overview-of-record-keeping-rules-for-business/
Sounds painful right?
It doesn’t have to be. There are apps that can help you keep it all under control without have to hire a storage locker and without the risks of papercuts.
You want a system that is easy to capture your info in the first place and something that is searchable (ever needed to return something??) and that connects to your accounting software too.
For our clients we think the best option is Receipt Bank (or Dext in the new lingo). The phone app makes capturing receipts on the go super easy, just snap a picture – done!
What about bills that arrive by email? Simply forward them to your personalised email address.
That’s it! We manage the rest.
We’ll ask you to upload the one or two items you forgot about, we’ll classify and process everything and push it into xero.
When your accountant asks to see tax invoices for your new office equipment, its all there in xero, right on the transaction.
Need to download your phone bills in bulk to get a better deal from a competitor? Easy, search and select in ReceiptBank and download them all at once.
Need 2 to sign for bank transfers? Download copies of all the bills you want to pay for easy authorisations.
Working on a cost plus construction job and need to provide details for you client? Quick search on job code and bulk download the costs.
If you’ve just realised you could find yourself in a spot of bother – ask us to help you move to electronic record keeping – it really is a smart move.
