Maintaining accurate and up-to-date records in a company is important for the success of the business. Organised business records help you reduce losses, meet any legal and taxation authority requirements, and manage the cash flow of the company. Your accountant can help you maintain business records.
Benefits of Keeping Accurate Business Records
All companies are required to keep some form of financial records that:
- record and explain the financial health and performance of your company, and
- help you prepare financial statements to be audited.
Overview of Financial Records
Financial records can include the following:
- receipts
- invoices
- cheques
- books of prime entry
- working paper and other financial records
These records can be recorded electronically, but make sure those records can be converted into hard copies. Even if your records are carried by your accountant or registered agent, but still, as a company officeholder, you are required to provide copies to auditors or whoever is responsible for inspecting your records. According to Section 286 of the Corporations Act, financial records are required to be maintained for at least 7 years even after the completion of the transactions recorded in those documents.
What Types of Records Your Company Must Keep?
Take a look at the following section to know the types of records every company must keep:
- Financial statements: A company need to maintain financial statements that include things like income statements, balance sheets, taxation returns, and depreciation schedules.
- General ledgers and journals.
- Electronic copies of important documents: It is suggested to take back up of your most important documents every week or daily.
- Cash records: Cash records include cash receipts, petty cash books, records of bank deposits, and cheque butts.
- Bank statements, loan documents and bank reconciliation.
- Records for sales and debtors, including the debtors ledger, sale journal, invoices issued, list of debtors, delivery dockets, and statements issued.
- Received and paid invoices: These can include annual returns, wage records, correspondence and superannuation records.
- Any unpaid invoices.
- Minutes of directors’ meetings: Any resolution released/passed by members or directors need to be minuted.
- Any relevant registers: It can include a register of members, debenture holders, options, or any other relevant items.
- Deeds: These can be deeds of debentures, trusts, agreements and contracts, or any inter-company transactions.
Apart from the above-mentioned records, what else your company should consider? Companies need to prepare monthly statements to track the performance of the company and spot risks if any. Some examples include:
- Income statement: It gives an idea of the company’s expenses and revenue, and the profit and loss of the company.
- A statement of financial position: It gives an idea of the company’s equity and debts it owes (if any).
- Cash flow statement: Basically, it helps in summarising any incoming and outgoing cash.
Conclusion
The blog shares the company’s record-keeping requirements. However, don’t forget that every company’s record-keeping requirements may vary. Moreover, you can get in touch with Reliable Melbourne Accountants to know your company’s record-keeping needs.
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