What record-keeping requirements does the ATO have in place?

Posted on December 2, 2020 by admin

Record-keeping, if done well, can help running a business much easier. It gives you an overview of the business’ financial progress so that owners can assess their strengths and weaknesses and make decisions accordingly. Record keeping also enables owners to meet their tax and superannuation obligations easily – all the data and information required is readily available. Finally, record-keeping provides owners with a profile, of sorts, which demonstrates the financial position of the business to banks or other lenders. 

Record-keeping requirements related to tax and superannuation need to be met. The specifics will depend on the unique tax and superannuation and obligations your business may have and the structure of your business (sole trader, partnership, company or trust). 

The Australian Taxation Office (ATO), requires the following from all businesses: 

• The records cannot be changed and further, the information should be kept so that it cannot be changed or damaged. 
• The records must be kept for 5 years from the date they were prepared, obtained or a transaction was completed – or the latest act they relate to. The records might need to be kept for longer periods in certain circumstances. 
• The business must be able to show the ATO their records if requested.
• The records must be in English or easily translated into English.

The ATO will accept paper and electronic records. 

• There has been an inclination towards electronic record-keeping for both tax and super requirements as this makes certain tasks easier and reduces workload after initial set up. There may be some laws which require paper records in addition to electronic ones. 
• Businesses may also keep paper records electronically i.e. scan paper documents and store them on an electronic medium (and dispose of papers).
• If records are stored electronically, then they should be on a device which owners have all access to, has been backed up, and allows the owner to have control over the information that is processed, entered or sent from the device. 

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Things you should do every time you get paid

Posted on January 20, 2021 by admin

It can be tempting to treat yourself on payday, but in the long run, planning your spending will be more rewarding. Creating a payday routine will help you pay your bills on time and save more money to put aside. 

The very first step needs to be completed the night before payday. Transfer any funds you have leftover from the previous payday to your savings account. This will allow you to spend less money you consider ‘extra’ and save it for your long-term goals.

The second thing you need to do is pay as many bills as possible, rather than wait till the ‘due date’. As it is, once money comes into the account, a lot of it is earmarked for bills and payments that need to be made, so rather than holding off on them, you should pay them immediately. This will also give you a clear indication of how much money you have.

Finally, creating a to-do list on the day of your payday is an effective method of viewing or planning your expenses. This will give a clear indication of small and large expenses that need to be paid before your next payday. They will also help identify unnecessary expenses or when extra money is being spent when it shouldn’t be. 

These are simple techniques that anyone can apply to get ahead of over-spending on payday. 

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