Record-keeping for business – what you need to know!

Post published:20/02/2023
Post category:Business / Tax
Post author:Laura Piciocco

As a business owner, it is your responsibility to understand your record-keeping obligations.

So we’ve put together a summarised guide on what you need to know:

What is a record?

A record documents transactions made by a business in relation to tax and superannuation.

The record should include information on the date, amount, GST and purpose of transaction so we can understand how this relates to your business’ expenses.

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ATO’s five rules for record-keeping

You need to keep all records related to starting, running, changing, and selling or closing your business that are relevant to your tax and super affairs.
The relevant information in your records must not be changed.
You need to keep most records for five years (see below for more information).
You need to be able to show us your records if the ATO asks for them.
Your records must be in English or able to be easily converted to English.

Source: ATO – Overview of record-keeping rules for businesses

Which records do you need to keep more than five years?

Records linked to an amended tax return or document
Records with information that has been used twice
Records of depreciating assets
Records of capital gains tax assets
Petroleum resource rent tax records

What are the benefits of keeping good records?

Helps you make better business decisions
Know whether your business is running well
Ensures you meet your tax and super obligations
The information is readily available if the ATO does an audit

Managing your records

You can choose to look after your own records or enlist a tax agent or bookkeeper. However, you still have primary responsibility of your records if you choose to do this.

If you choose to manage them yourself, you will have to select a business record-keeping system and use the ATO’s evaluation tool.

The ATO completes reviews and audits to ensure you’re correctly managing your records and keeping them secure. If they find discrepancies, they may issue penalties.