Keeping accurate records is vital for every business. Not only does it give you a good indication of the financial performance of your business, but it is also a legal requirement to do so. Records need to be kept for five years after they are prepared, obtained or the transactions completed – whichever occurs latest – and the records need to be legible and in English.

Other reasons for keeping your business records up to date and organised include:

•  It makes it easier to complete your activity statement obligations and prepare your annual income tax and fringe benefits tax returns.

•  It helps you manage your cash flow so you can pay your tax when it falls due.

•  It helps you monitor the progress of your business and can help you make business decisions, such as managing your debtors and creditors more effectively.

•  It clearly outlines your financial position to banks and other institutions.

•  Being able to receive more effective advice from your tax advisor. Rather than paying them to sort through paperwork, your tax advisor can provide you with financial planning advice and help you build a strategy for your business.

When running a business, you need to keep records explaining all the transactions that relate to your tax affairs, such as:

•  Sales and expenses invoices.

•  Sales and expense receipts.

•  Cash register tapes.

•  Credit card statements.

•  Bank deposit books and cheque butts.

•  Bank account statements.

Most businesses use accounting software programs such as MYOB, Quickbooks or Xero to reduce the workload involved in record keeping and to produce informative reports at certain dates for your business. Creating a formal system to keep track of your records will make it much easier to retrieve information. If you need help with any aspect of your business, whether it be accounting, tax or legal advice, our accountants and lawyers can assist you. Submit an online enquiry or call 1300 QUINNS (784 667).