Although record keeping is a tedious task for many businesses, it’s still a vital one. In fact, it is required for all business sizes because it will keep documents organised, which will streamline processes, including their cash flow. With efficient record keeping, you will be able to come up with better decisions. While record-keeping is crucial, keep in mind that it is also a legal obligation in Australia to maintain financial and employee records associated with fringe benefits and capital gains.
In this article, we will share all you need to know about basic financial record keeping requirements for small businesses:
Basic Financial Record Keeping
Every business, including online stories and influencers, must explain their financial transactions that take place in their companies, whether on paper or electronically. Some records may need to be preserved for five years, while some, even longer. Losing such documents will make your business liable to penalties and can also tarnish your reputation.
With that being said, here are the financial records you must store safely:
Basic Accounting Details: Records of financial statements, including profit and loss statements, and balance sheets.
Tax Reports & Returns: Records of tax returns and reports.
Banking Details: Business and credit card statements.
Inventory & Asset Records: Details of on-hand stocks at the end of each financial year and information about the purchased assets.
Invoices & Sale Receipts: Sales invoices and receipts for providing goods and services, including cash sales.
Invoices & Purchase Receipts: Records of purchases made by the company and bills payment (such as utilities).
Staff & Wage Expenses: Details of staff’s salaries and wages and payments made to other businesses on behalf of your services.
While financial records are required and requested by the ATO, you might be faced with other government obligations as well. Here are the other basic records you must keep:
Occupational training records: Documentation to help employees to comply with work, health, and safety laws.
Work, Health and Safety (WHS) records: Incidents, risk register, and management plan in the workplace. Additionally, this must include workplace assessment and Material Safety Data Sheets (MSDS).
Agreements: Sales and purchase contracts, loan agreements, rental or lease agreements, and franchise agreements.
Other documents: Deposits with utilities, contracts with phone companies, business name registration certificate, capital gains records.
The Importance Of Solid Record Keeping
Indeed, there are plenty of documents you need to keep track of, such as those shared above. If you don’t carefully keep them, you could incur high penalty rates that will affect your cash flow and reputation. That is why you need to have an efficient record-keeping system in place that will be managed by a bookkeeper, such as the experts at The ECommerce Accountant!
Your bookkeeper will handle all of these documents and ensure that everything is in order. That way, when the documents are needed, you don’t need to scramble to find where they are. Additionally, efficient record-keeping isn’t only for government purposes but also to help you make sound decisions for your business, keep track of your expenses, and ensure that everybody in the workplace is getting proper compensation.
On top of that, excellent record keeping will provide you with valuable insights you can use to move your business towards success.
At this point, you now know more about the basic record-keeping solutions for small businesses. With an expert bookkeeper by your side, you don’t have to worry about any of these. Your hired help will take care of everything so that you can oversee other important aspects of your company.
Are you looking for a reliable e-commerce accountant in Australia for your business, then you have come to the right place! Our experts at The Ecommerce Accountant have years of experience in the field. Get in touch with us today to book a FREE strategy session!