Business record-keeping requirements

Businesses 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. The five rules for record-keeping apply to all records your business needs to keep to meet your tax, superannuation and employer obligations. 

It is imperative that you understand the record-keeping requirements for your business and make it a priority to keep accurate and complete records. By doing so, you can avoid the various penalties that may apply. 

The following tips can help you get it right and are based on the common record-keeping errors that ATO sees. 

• Keep accurate records of all cash and electronic transactions 
• Complete regular reconciliation of your sales (both cash and EFTPOS) and enter the amounts into your main business accounting software system. Depending on your business, this may be daily, weekly or monthly.
• Where business expenses have both business and private use portions, work out and record the business portion accurately.
• Ensure you have sufficient records to substantiate business expenses claimed as tax deductions.
• Don't use estimates to prepare your tax returns and business activity statements (BAS). Ensure you have complete and accurate records to substantiate the information you include in them.
• Be accurate in how you use your source records to work out the amount you claim for the research and development tax offset, if this is applicable to your business.

You can also use the ATO's record-keeping evaluation tool to find out how well you are currently keeping your business records. 

For more information please visit the ATO website or contact our office. 

The Money Edge | Bundaberg