Record keeping

A good record keeping system will help you track your business performance, meet your reporting responsibilities and access finance. Good record keeping doesn’t have to be stressful and difficult, the key is to find a system that works for you.

What records you need to keep

The types of records you are required to keep include:
  • Records for all income (including cash, online sales and other amounts you receive).
  • Records for your business expenses (such as purchases of materials, rent, other operating expenses and payments you make to employees and contractors including any cash wages).
  • Tax invoices, source documents or receipts for all your expenses and asset purchases.
  • Bank statements and loan contracts.
  • Records to track amounts owing to you by your customers (accounts receivable).
  • Records to track amounts owing to your suppliers (accounts payable).
  • Employers are required to keep certain information for each employee.

Some tips for keeping your business records

  • Use on online accounting system such as Quickbooks, MYOB or Xero.
  • Keep evidence of all transactions.
  • Take pictures of your receipts to avoid faded records.
  • Keep your business records separate to your personal records.

How to organise your finances

Organise your finances and keep your business on track:
  • Set up a business bank account.
  • Set up an online accounting system.
  • Keep your accounting records up to date.
  • Manage your cash flow.
  • Make sure you are making a profit.

Understanding your profit and loss report

Being able to effectively manage your income and outgoing expenses ensures you have a healthy business. Your profit and loss report is a summary of your income and expenses for a given period of time and tells you how much profit you’re making or how much you’re losing after expenses but before tax is paid.
Reviewing your profit and loss report allows you to:
  • Identify trends in your income, expenses and profit.
  • Understand where you can reduce expenses.
  • Decide if you need to increase your income.
  • Identify the need to seek tax planning advice.

Why is the balance sheet important?

The balance sheet provides a picture of the financial health of a business at a given moment in time, usually the end of a month or financial year. It can tell you if you owe more money than what you currently have, the current value of your assets and the overall value of your business.
More importantly, the balance sheet can provide warning signs so that you can solve any problems before they destroy your business.
It is a vital financial statement you should be reviewing regularly, as it changes with every transaction.

Are you looking for some help with your record keeping?

Would you like to:
  • Save time on your record keeping so you have more time to focus on other aspects of your business.
  • Reduce the stress around meeting your GST and payroll reporting obligations.
  • Have reliable data and reports to help you to understand how your business is performing, manage your cash flow, make more informed decisions and improve your business.
I’m Sharon, a registered BAS agent with more than 20 years' experience in the industry.Get in touch to find out how I can support you and your business to stay on top of your numbers to run a successful business.
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