Pay InvoiceTax Planning Sessions

Record-keeping for Businesses

Record-Keeping Tips That Will Help Your Business Avoid Errors During This Tax Season

Record-keeping is a requirement by law and the Australian Taxation Office (ATO). A business that doesn’t comply with record-keeping requirements may face legal and financial consequences.

So, as a business owner, it is your responsibility to know what records are required, along with making sure that they are not only accurate and up to date.

record-keeping- benefits of keeping your business' financial records

The ATO has highlighted five rules of record-keeping for businesses, which include:

  • Keeping all the records relating to your tax and super affairs
  • Protecting your records so that the information isn’t changed or the record isn’t damaged
  • Keeping the majority of the records for 5 years (usually from the date of competition of transactions or the time preparing or obtaining the record)
  • Keeping records accessible when the ATO requests them
  • Records must be in English or can be converted to English easily.

Record-Keeping Tips To Get It Right This Time

record-keeping tips- record keeping practices to make this tax time easier for yourself

Now, the ATO has also stated some tips to avoid common errors that they see a lot of business owners make. So, the following are some of the tips that can help you get it right:

  1. Make sure you accurately log all cash and electronic transactions. This is the foundation of good record-keeping.
  2. Regularly reconcile your cash and EFTPOS sales. Match your internal records with external ones and input these amounts into your main accounting software. Depending on your business needs, this could be daily, weekly, or monthly.
  3. If something doesn’t add up, don’t ignore it. Go back and check for errors.
  4. For expenses that serve both business and personal purposes, accurately determine and record the business portion.
  5. If you’ve used trading stock for personal use, treat it as if you’ve sold it. Include its value in your business’s income to ensure your cost of sales figures are correct.
  6. Keep enough records to back up any business expenses you claim as tax deductions.
  7. Don’t use guesses when preparing your tax returns and business activity statements (BAS). Make sure you have complete and accurate records to support your claims.
  8. If applicable, be precise when using source records to calculate your research and development tax offset.
  9. Typically, you need to keep most records for 5 years from when you created or obtained the record or completed the transaction, whichever is later. For instance, if you buy a plot of land for your business, keep the records for 5 years after the handover. If you build a property on that land, keep the records for at least 7 years.
  10. Ensure your records cover the end of any review periods.
  11. If your business incurs a tax or capital loss, retain records on how you determined and worked out that loss for 5 years or until the end of the review period for the year the loss is fully deducted, whichever is later.
  12. If you’re paying contractors, keep detailed records of payments. This will help you prepare your taxable payments annual report (TPAR) at the end of the year.
  13. If claiming GST credits, set aside GST in a separate ledger account. This makes record-keeping and calculations simpler.
  14. If PAYG amounts were withheld from your business payments, ensure your payer provides a PAYG payment summary. You’ll need this to substantiate any PAYG credits in your tax return.
  15. Take advantage of tools like the ATO’s Record-keeping evaluation tool to assess how well you’re managing your business records.

The Benefits of Good Financial Record-Keeping

record-keeping - business records you need to keep this tax season

When we look at successful businesses, a common thread is that they keep accurate and complete records. Here’s why it’s so beneficial:

  • Accurate records help you understand whether your business is making a profit or running at a loss.
  • With complete records, you can make better business decisions based on solid data.
  • You can easily keep tabs on the money you owe and the money owed to you.
  • Accurate record-keeping helps you avoid penalties for failing to maintain proper records.
  • Clear records allow you to demonstrate your financial health to lenders, other businesses, tax professionals, and potential buyers.
  • With complete records, you can easily monitor your cash flow, which will ensure that you can make payments on time.
  • Keeping accurate records simplifies meeting your tax, super, and employer obligations. It makes preparing and lodging returns, BAS, and taxable payments annual reports much easier.
  • If your business is audited, having complete records can make the process smoother and quicker.

Hopefully, this blog has provided you with enough information about record-keeping to keep you out of trouble this tax season. 

To learn more about the tips that could help you during this tax season, you can read our blogs or get in touch with one of our expert tax accountants. At Clear Tax Accountants, we can not only help you save a lot on taxes but also help you understand our tax obligations better. 

So, what are you waiting for? Contact us at 1300 417 399, or you can just drop us an email at


Disclaimer: This website is designed for informational and educational purposes. Although we exert diligent efforts to maintain the accuracy and reliability of the content, we must disclaim liability for any errors, omissions, or inaccuracies. The content provided is “as is” and is not accompanied by warranties, whether expressed or implied. It should not serve as the sole basis for financial or legal decisions.

Given the evolving nature of financial regulations and conditions, the accuracy and reliability of information may change over time. Users are urged to exercise due diligence and consult with a qualified financial professional for personalized advice. ‘Clear Tax Accountants’ bears no responsibility for direct or indirect consequences, encompassing financial loss or legal matters stemming from the use or misuse of the information on this website.

Please be aware that the information, by no means, is a substitute for financial advice.