Bookkeeping for Small Business Owners
As a small business owner – it’s never too late to put a record keeping system in place for your business. At the end of the day, it is an integral part of being a business and will help ensure all of your cash flow is counted for and also that you meet your obligations to the tax department.
The following information is taken from: https://www.business.gov.au/news/record-keeping-for-small-business-owners
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.