Record keeping for small business: what to keep and for how long

Good records make your BAS and tax return quicker and cheaper, help you claim every deduction and protect you if the ATO asks questions.

How long to keep records

In most cases you must keep business records for five years from when you prepared or obtained them, or from when you completed the transactions, whichever is later. Records for assets (such as property or equipment) should be kept for five years after you sell or dispose of the asset, so you can work out capital gains or depreciation.

What to keep

• Income – sales invoices, receipts, bank deposits and payment platform reports.
• Expenses – tax invoices and receipts for purchases, and bank and credit card statements.
• GST – tax invoices for purchases where you claim GST credits.
• Employees – payroll records, super payments, TFN declarations and Single Touch Payroll reports.
• Vehicles – logbooks, fuel and running costs.
• Assets – purchase and sale documents, and depreciation schedules.
• Year-end – stocktake records, debtors and creditors lists.

Paper or digital?

Digital records are accepted, as long as they are a true and clear copy of the original. Photograph paper receipts before they fade. Accounting software such as Xero, MYOB or QuickBooks can store receipts against each transaction, and linking your bank feed saves hours each quarter.

Simple habits that help

• Use a separate bank account for your business.
• Upload receipts weekly, not at the end of the quarter.
• Reconcile your bank account in your software every month.
• Write a short note on unusual transactions while you still remember them.

We offer bookkeeping and one-on-one bookkeeping training so you can manage your own records with confidence. Ask us about it.

This article is general information only and does not take your personal circumstances into account. It is not financial or tax advice. Tax rules change, so please contact us before acting on it. Information current as at the date above.