Record-keeping for businesses

Monday, January 16, 2012 by Wakeful Partners | No Comments | Taxonomy: ,

With the introduction of benchmarking, record-keeping has become the name¬†of the game when a taxpayer is audited so they can prove their figures are¬†correct. The following is an excerpt from the ATO’s stance on record-keeping.

The ATO would expect a small business to:

  • Record each individual sales transaction through their cash register or point-of-sales system;
  • Conduct a daily sales reconciliation between the ‘z’ total (or end-of-day report if they use an electronic system) and cash in the register, taking into account cash taken from the register for business and personal expenses;
  • Transfer the daily sales total into a cash receipts book regularly;
  • Perform bank reconciliations between bank statements and the cash receipts book, at least monthly;
  • Retain for a period of five years:
    1. the ‘z’ totals or point-of-sales system end-of-day reports;
    2. daily reconciliations;
    3. bank records and cash receipts book; and
    4. till rolls or end-of-day reports that record details of each individual transaction (if ‘z’ totals have been reconciled with actual cash sales and banking, detailed till rolls may be discarded after one month); and
  • Maintain a filing system to keep track of paid and unpaid accounts.

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