For every business’s success, maintaining good bookkeeping is one of the most important tasks. Therefore, it is important for every business owner to maintain their business books. In today’s blog, we’ll share a few tips that entrepreneurs can follow for better record-keeping:
Understanding Record-Keeping of Business
A record contains super and tax-related transactions conducted by your company. The records must have the right information for the ATO to determine the purpose of the transactions, so they can understand how relevant your records are to your business’s expenses and income. The minimum information you need to maintain includes:
- Amount, date, and character (for instance, wages, purchase, sale, and rental) and the right information regarding GST for the transaction.
- Purpose of each transaction.
- The connections or associations among the parties involved in the transactions.
Record-Keeping Tips for Business Owners
Take a look at the following section to know how you can improve your business books:
- Maintain all your business records, including income, expenditures, bank and other goods and services tax (GST) records for at least five years (even though there are records that are required to be kept for a longer period of time).
- All records need to have the right information to calculate and support amounts that are claimed on activity statements and tax returns.
- Your business records must contain all cash, online, bank statements, EFTPOS, debit and credit card transactions.
- Check the tax invoices that you received for purchases that include GST are valid.
- You need to keep all those records that demonstrate when business purchases were used for personal purposes – it will help you work out the business portion that you can claim as a deduction.
- Don’t mix business expenses with personal expenses because it will create confusion.
- Ensure to take a picture of paper receipts to avoid mess.
- You need to record all information electronically and make sure to have a backup, where possible.
- If any changes are made to the record-keeping software that you used during the year, ensure to check all data is transferred accurately.
When you run your business, you need to keep information on all financial transactions relating to your superannuation affairs and tax, specifically:
- Any documents relating to your business’s expenses and income.
- Any documents that contain details of any choice, election, estimate and calculation you make for taxes of your business and super affairs, including how the estimation was made.
Benefits of Maintaining Accurate and Complete Records
The reason behind running a successful business is to have well-maintained business records. Accurate business records will allow you to:
- Check the financial health of the company and know whether your business is doing well.
- Ensure that you make appropriate choices for your company.
- Keep an eye on the money you owe and the money owed to you.
- Keep track of the cash flow of your company so you can make payments on time.
- Avoid penalties that you may have to pay when failing to keep records.
- Show your financial status to businesses, lenders, prospective buyers and tax professionals.
- Easily meet your super, tax, and employer obligations, including preparing and filing your tax returns, taxable payments annual report and BAS.
- Provide the required information that ATO needs if they audit your business, making the whole process easier.
Conclusion
The blog highlights points that show the importance of keeping accurate and complete records of your company. You can have various benefits if you have enough and the right records of your business. Moreover, you can also get help from Reliable Melbourne Accountants for maintaining accurate records.
Other Useful Links:-
tax return accountant
Accounting Firms Melbourne
small business accountant near me
Subscribe our YouTube channel for more updates: