Record Keeping for Cash Businesses

record keeping

Are you a small business, finding it hard to keep track of your records? Do you throw your receipts into a shoebox, filing cabinet or even the bin! Do you get the 30 June and can hardly read your receipt?

Did you know record keeping doesn’t have to be painful, there are many Apps, software programs and cloud base storage facilities that can free up your time and filing cabinet.

Apps such as the Xero App and Receiptbank are great at capturing and coding expense receipts, and cloud based storage solutions like Dropbox and Onedrive offer free storage to keep your records handy and backed up. 

It is a good idea to set aside time each week to maintain your business records. This will save you time come 30 June each year.

So how long do you need to keep records for and what type of records should you keep?

By law small business should be keeping records for at least 5 years. This includes even if you sell your business or cease trading, you are still required to keep your records for the full period before destroying them:

Records to Keep:

  1. Income Records
    1. Tax invoices
    2. Receipt Books
    3. Cash Register Tapes
    4. Diary of Cash Sales
    5. Take a picture of the invoice and add it your app or cloud based storage
    6. Wherever possible, email a copy of the receipt to the customer that way you have a record
  2. Expenses/Purchases Records
    1. Receipts
    2. Tax invoices
    3. Cheque books
    4. Diary of cash purchases
    5. Take a picture of the invoice and add it your app or cloud based storage
    6. Wherever possible, ask the supplier to email you a copy of the receipt that way you also have a record
    7. If you are registered for GST, you  must have a tax invoice to claim the input tax credits for anything over $82.50.
  3. Bank records
    1. Deposit slips
    2. Cheque butts
    3. Bank/Loan statements
    4. Credit card statements
    5. It’s a good idea to request bank statement to be emailed to you electronically rather than paper copy. This way you have an electronic record.

So however you choose to keep your records, be consistent and persistent. Remember, it’s not only your obligation as a tax payer and business owner, but it’s the law.

If you struggle to maintain your records, why not hire a professional bookkeeping firm to help keep you up to date.  The small monthly fee will be worth avoiding the continual frustrations. They can set up your accounting software, data enter your expenses, reconcile your transactions, and even prepare and lodge your returns.  Check out www.evolveonlinebookkeeping.com.au

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About the author

Katrina specialises in small business entities and self-managed superannuation funds. She is currently studying the Chartered Accountants Program to gain her CA qualification.