Record keeping is quite a complex as well as a tedious practice. Though, it is an important part of every small or large business. You need to invest time and resources in record keeping. When you don’t handle the bookkeeping precisely, it can lead to multiple errors. This includes risk mitigation, future planning obstacles, and fines.
Record keeping is beneficial for your firm because:
- It helps the company monitor its development.
- Allow the business to meet its compliance deadlines.
- Ensuring better cash flow management.
- Enable them to show their monetary situation to banks or different loan specialists.
What business records you must keep?
As a bookkeeper, you have to keep records of your company. The types of transaction records you store relies upon the tax responsibilities of your firm and the structure of your firm. That is, whether it is sole trading, a partnership, a trust, or a company.
As per the guidelines of the Australian Taxation Office:
- The records of firms can never be changed. Plus, they have to be stored in a manner that prevents the data from getting altered or the record maligned.
- The firms are obliged to save most records for 5 years, beginning from when you arranged or acquired the records, or finished the transactions.
- Firms must show the ATO their records whenever they request them.
- The records have to be in English or ready to be effectively changed over to English.
How can a business keep records?
The ATO always advises the business to store and prepare their records in electronic form. Because of the continuous trends emerging and new policies regarding taxes, keeping records electronically makes processes less complex for businesses. Also, using electronic tools for bookkeeping purposes can save time and money.
When utilising accounting software for bookkeeping, the ATO doesn’t ask for paper copies unless a specific principle or regulation demands one.
The ATO also keeps all the copies in its highly-secured and encrypted storage systems. These electronic copies of records are verified and true.
The businesses must make sure that they record everything in a safe place and conduct a timely backup. For these purposes, business owners can leverage cloud-accounting technology. With cloud storage, your employees can access the data anytime and from anywhere.
For how long, you must keep records?
As per the ATO, a business must keep records for at least 5 years. Various times you should hold the transaction records for more time because of multiple reasons, like – if your business had a capital gains event.
You know ATO also offers an app named “myDeductions”. This app makes the recording of income and expense transactions safely in one place. You can also use different accounting software like – XERO and QuickBooks.
How Outbooks can help?
Businesses have to shift towards a more advanced record-keeping approach to keep up with emerging trends and government compliance. The Australian Taxation Office frequently introduces different policies to support SMBs.
When you hand over your accounting and bookkeeping work, such as payroll management, tax filing, and boring data entry, you can get more time to focus on important client-satisfactory tasks. Our expert team will complete all your bookkeeping tasks on time with accuracy and provide you with the best results.
Have some doubts? Reach out to us here