As a business owner you must keep business records and documents for tax purposes. Keeping good records of your transactions and tax invoices will help you to monitor the financial performance of your business as well as comply with your tax obligations.
Good record keeping
You are legally required to keep records for a period of at least five years after they are prepared, obtained or the transactions completed (whichever occurs last).
Records must be in English and in a format accessible to the Australian Tax Office (ATO). You can incur penalties if you do not keep the right tax records.
Your obligations to keep records continue even after you sell or close your business.
It is a good idea to set aside time each week to maintain your business records.
TIP: The ATO has developed a record keeping evaluation tool to assist you to find out what records you need to keep for your business.
Business records you need to keep
You are required to keep various business records for tax purposes.
Income tax records including:
- income and sales – sales invoices, receipts, cash register tapes and cash sales
- purchase and expense – tax invoices, cheque book records, and receipts
- year-end records – list of debtors and creditors, stocktake sheets and depreciation schedules
- bank records – bank statements and loan records
- goods and services (GST) – tax invoices from suppliers.
TIP: We recommend downloading the booklet on How to set out tax invoices and invoices from the Australian Tax Office (ATO).
Staff or employee records including:
- tax file number (TFN) and withholding declarations
- records of wages, allowances and other payments
- superannuation records
- fringe benefit tax (FBT) details.
The ATO has information and a record keeping tool detailing the exact records you need to keep.
Assistance for small business
The ATO offers a range of free services including workshops and webinars to help you understand and comply with your tax obligations.
You can register for these services online or by phoning the ATO on 13 28 66 (during office hours).
You can also get a registered tax or BAS agent to help you. Registered agents are qualified and experienced with tax and can legally charge you a fee.