Now you've decided to go into business, it's vital that you keep accurate records.
It makes it easier to keep track of your income and expenses and will assist you with budgeting and management decisions. There is also a legal requirement to keep accurate records.
There are a few basic rules for effective record keeping:
- Keep all records for at least 5 years.
- Electronic records are OK, but please remember to back up your information on a regular basis.
- Keep receipts for all transactions, even those under $50.
- Keep copies of any records that might fade like EFTPOS receipts.
- Staple small receipts to an A4 sheet to avoid losing them.
- All records must be in English (unless you have approval from us to use a different language).
- If you haven't already opened bank accounts for your business and another account where you deposit enough money for your tax payments you should do so now.
- There are some useful resources to assist you with effective record keeping.
You'll find some useful tools on our website:
- Fact sheets on Record keeping
The Income Tax Act requires that every person carrying on a business or deriving income other than salary and wages shall keep sufficient records to enable that person’s assessable income and allowable deductions to be readily ascertained by the Tax Department.
Decide on a record keeping system that suits you, e.g. you may choose to use a cashbook or an accounting software programme.