Australian Online Tax And Accounting Services

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Income tax and GST

You must keep the following records:

  • sales records 
    • sales invoices, including tax invoices
    • sales vouchers or receipts
    • cash register tapes, credit card statements
    • bank deposit books and account statements
  • records of purchases expenses 
    • purchase/expense invoices, including tax invoices
    • purchase/expense receipts, which include an ABN
    • cheque butts and bank account statements
    • credit card statements
    • records showing how you worked out any private use of something you purchased
  • year-end income tax records 
    • motor vehicle expenses
    • debtors and creditors lists
    • stocktake sheets
    • depreciation schedules
    • capital gains tax records.

Payments you made to your employees

You must keep the following records:

  • tax file number declarations and withholding declarations
  • withholding variation notices
  • worker payment records
  • pay as you go (PAYG) payment summaries
  • annual reports
  • super records
  • records of any fringe benefits you provided.

PAYG withholding for your business payments

You must keep the following records:

  • records of amounts you withheld from payments where no ABN was quoted
  • a copy of any PAYG withholding voluntary agreements
  • records of voluntary agreement payments
  • all PAYG payment summaries including PAYG payment summary - employment termination payments
  • all PAYG annual reports.

Fuel tax credits:

You must keep records of:

  • fuel you acquired
  • eligible and ineligible fuel use
  • claim calculations
  • any fuel you lost, sold or disposed of.

 Here are some tips to keep you on top of your record keeping - and some traps to avoid.

  • Get organised and stay organised.
  • Decide what record keeping system works best for you. Some people may prefer to keep paper records, while others find an electronic software package more efficient.
  • Set up a good filing system for your paperwork. If you don't record your transactions frequently, it is important to have a system for filing information that needs to be entered.
  • A good filing system will help you follow up overdue debts and know when your accounts are due to be paid. This will help you manage your cash flow.
  • Make sure your records can be understood by anyone, not just one person. Document how you keep your records, what your various records contain and where they are kept, and where you keep your back-up records.
  • Obtain the required paperwork from suppliers and customers at the time of a transaction and record details as soon as possible - don't leave it until later. You need paperwork to support your claims for tax deductions.
  • Make sure your records contain enough information; for example, tax invoices with all the required information and cheque butts correctly filled out. It is a good idea to cross-reference records; for example, when you pay bills, write the invoice number on the cheque butt and the cheque number on the invoice. You can also add notes to paperwork that will remind you later of special circumstances.
  • Get into the habit of entering transactions into your cash books or software program regularly to keep your files up to date. You may choose to do this daily, weekly or monthly - but remember, the longer you leave it, the more difficult it is to catch up. Never leave record keeping until the end of the year.
  • Make sure you enter transactions correctly into your cash books - mistakes can be costly.
  • Don't mix up personal and business paperwork; for example, by using business bank accounts and credit cards for personal transactions and vice versa.
  • Ask for help before things get out of control. You may want to engage a bookkeeper to set up your books or set up a software program. Remember, these costs are generally a tax deduction for your business.

Cross-referencing your cheque butts and invoices

Cross-referencing cheque and invoice numbers can save you or your accountant a lot of time and will make things easier to find.

Record of cash drawings

Keep a record of cash takings used for other purchases or private purposes - it will help you reconcile daily sales. For supplier invoices or statements, write cheque number and date paid.

Loans and one-off transactions

Keep records of one-off, transactions handy - your accountant will need to see loan documents, lease agreements and contracts.

Source: Record keeping for small business