Record Keeping For Small Business

Posted by on 21 January 2013 | 0 Comments

What are a business's record-keeping requirements?

Record keeping is a legal requirement. By law, businesses must keep records:

◊ for five years after they are prepared, obtained or the transaction is complete, whichever occurs last

◊ in English and in a form that we can access and understand to work out the amount of tax you are liable to pay.

For example, the ATO would expect a retail business to:

◊ record each individual sales transaction through their cash register or point-of-sales system

◊ conduct a daily sales reconciliation between the 'z' total (or end-of-day report if they use an electronic system)  and cash in the register, taking into account cash taken from the register for business expenses and personal use

◊ transfer daily sales total into a cash receipts book regularly

◊ perform bank reconciliations between bank statements and cash receipts book, at least monthly

◊ retain for a period of five years
     • the 'z' totals or point-of-sales system end-of-day reports
     • daily reconciliations
     • bank records and cash receipts book
     • till rolls or end-of-day reports that record details of each individual transaction (if 'z' totals have been reconciled with actual cash sales and banking, detailed till rolls may be discarded after one month)

◊ maintain a filing system to keep track of paid and unpaid accounts.