Are you struggling to keep up with your tax obligations?
We’ve all experienced it before. But there are many ways to break free from the stress during the tax season.
These 5 good record-keeping habits will make it easier for you to have all the documents necessary for ATO compliance. Moreover, these habits will save you more time and focus on your business.
5 Record-Keeping Habits
Tailor a system that fits your business
Find a system that does not only works for your business but can be easily understood by everyone involved in your daily operations. It doesn’t have to be complicated. There are ways to create a system that fits your situation such as:
- Setting up an electronic filing system
- Taking photos of receipts for back-up
- Separating business records to your personal ones
- Keeping evidence of all business transactions
- Categorising your filing system accordingly
Keep electronic records of tax receipts for the last 5 years
You should keep electronic records of your tax receipts for 5 years from the date of lodgment if you:
- Have deduction claims for depreciation (or decline in value)
- Are acquiring or disposing of an asset
- Have a dispute with the ATO
Some taxpayers with simple tax affairs can keep records for at least 2 years.
TIP: Organise your tax receipts from newest to oldest so you won’t have to rummage through a pile of receipts.
Back up your receipts and other necessary files
Remember to always keep a digital copy of your receipts and other transactional documents you have. As previously mentioned, it’s a good practice to take a photo of your receipts to have an electronic backup. This habit achieves three important things:
- Preserving receipts that may fade
- Having a copy in case the original file isn’t available
- Saving lots of time by attaching files to tax returns electronically
Going paperless when keeping these records helps you save time and space. It also protects your documents by setting up passwords and other security measures. Read our previous article about the benefits of having an online document management software.
Track your procedures
Monitoring your procedures lets you build better processes, or assess if you need to delegate record-keeping to a third party. Doing so gives you an idea whether your current procedures are working well for you and your business.
Engage a bookkeeper
It is a good strategy to have a trusted bookkeeper look after your records. They help you release the stress of record-keeping. Moreover, a bookkeeper helps you avoid committing mistakes, ensure your records are complete and up-to-date and have a better understanding of your compliance requirements.
Need help in record-keeping?
Focus Bookkeeping is here to help you with your record-keeping needs!
We also offer other services like bookkeeping, superannuation, and Business Activity Statements.
Read more about Fabiana and Focus Bookkeeping.
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