Staying on top of your records all year round can save time, prevent unnecessary stress and help maximise a small business’s tax return.
Although record-keeping can seem like a monotonous job, it is an essential part of running a business. Good record-keeping makes it easier to meet your tax obligations, manage cashflow and make sound business decisions.
Here are some business records you need to keep generally for 5 years after lodgement:
Expense or purchase records
You must keep records of all business expenses such as receipts, invoices including tax invoices, cheque book receipts, credit card vouchers and diaries to record small cash expenses.
These records include lists of creditors or debtors and worksheets to calculate depreciating assets, stocktake sheets and capital gains tax records.
Income and sales records
You must keep records of all sale transactions such as invoices including tax invoices, receipt books, cash register tapes and records of cash sales.
Documents such as bank statements, loan documents and bank deposit books need to be kept in preparation for your tax return.
Income tax records
Records must be kept of all your sales (income) and expenses to prepare your business activity statement (BAS) and annual income tax return.