BASIC RECORD KEEPING REQUIREMENTS FOR YOUR SMALL BUSINESS

BASIC RECORD KEEPING REQUIREMENTS FOR YOUR SMALL BUSINESS

BASIC RECORD KEEPING REQUIREMENTS FOR YOUR SMALL BUSINESS

Record keeping is one of the necessary requirements for all small and medium sized business in Melbourne and other parts of Australia. Experienced bookkeepers in Melbourne carries out this task by keeping track of all hard copies and electronic copies of source documents of all transactions including invoices and sales receipts.

These documents commonly contain amounts, transaction dates, legal agreements, as well as the client, customer, and business details. All businesses in Melbourne are lawfully obligated to keep employee records, financial records, and all other documents that are related to fringe benefits and capital gains.

There are many benefits to recordkeeping – one of which is it helps keep track of an organisation’s activities and documents and keep them organized. This paves way for a faster, simpler, and more effective cash flow. It helps entrepreneurs analyse their business performance and ensures that the bottom-line is monitored before important decisions are made.

Since records can be retrieved in a timely and accurately manner, it also helps in increasing the quality of business management. It helps make report submissions and tax filing easier and faster, thereby making sure that the business is legally compliant with authorities.

Record keeping provides tremendous help in managing employees. It lays out the wages, benefits and other work-related information of each employee, and makes sure that all due payments are made in a timely and accurate manner. Thus, helping improve or maintain good employer-employee relationship.

These records are also great for when a business is applying for loans or getting funding from outsiders. Furthermore, since customer complaints are also included in the records, the management can use the records to look at the lapses and improve their customer service.

So, what are the requirements handled by bookkeepers when record keeping for small businesses? Well, without further ado, here they are:

REQUIREMENTS FOR FINANCIAL RECORDKEEPING

As stated by the law, all businesses are obligated to explain all company financial transactions either on paper or electronically in English or in any available language. Other records need to be kept for long periods of time, while some of them can be discarded after 5 years. Any business in Melbourne who fail to keep records of these transactions or documents may become liable to penalties from authorities such as the Australian Taxation Office or ATO.

While a bookkeeper in Melbourne already knows which records to store safely, here is a list that bookkeepers store, just for the sake of providing you with vital information.

Sales Invoices and Receipts – These are documents providing details for providing goods and/or services. These must also include all cash register tapes and sales.

Purchases Invoices and Receipts – These documents pertain to all purchases made by an organisation such as purchases of raw materials. These records also include all payments made for bills such as utilities.

Expenses for Staff and Wages – Businesses are also required by the government of Australia to keep all details pertaining to the wages and salaries they paid to their workforce or employees. These also include all payments made by the business to other entities in Melbourne in behalf of their employees like tax deductions, insurances, superannuation, etc.

Basic Accounting Details – All organisations in Melbourne are legally obligated to keep records of their business’ financial statements. These records include balance sheets, as well as profit and loss statements. These records need to be updated by qualified bookkeepers in Melbourne.

Tax Reports and Returns – The bookkeeper of a business in Melbourne keeps records of tax returns and reports and submit them once a year. These records include BAS, GST annual returns, PAYG withholding annual reports, etc. Due to COVID-19, new tax measures were introduced by the Australian government. Bookkeepers and organisations in Melbourne need to keep their records in accordance with these new tax measures.

Banking Details – A business’ bookkeeping system should also contain complete record of the organisation’s bank account details, as well as credit card statements. Record keeping on your own can end up making a mess with your company records, so make sure to leave this to a qualified bookkeeper in Melbourne to make sure that your personal account is separated from your business account.

Assets and Inventory Documents – At the end of each fiscal year, a bookkeeper will typically store all details with regards to on hand stocks. This will also include all data related to the purchased assets. This are enhanced for calculating capital gains and loss.

Now, apart from financial records that need to be stored in accordance ATO directives, all businesses in Melbourne are obligated by other branches of the Australian government to safely keep other records.

REQUIREMENTS FOR BUSINESS BOOKKEEPEING

For every business in Melbourne, it vital to safely keep all records of their employees and staffs. In order to meet government regulations, a business needs to keep these records protected even if the business ends up shutting down or even after it is sold to another organisation.

Aside from employee and staff records, there are still other records that companies need to conserve. Bookkeepers generally update these records on a daily basis to ensure that the businessowner is fully informed. Entrepreneurs can also take the opportunity provided by the recordkeeping assessment tool to correctly identify which records to keep. To make it simpler for you, we have listed all the requirements for business bookkeeping in Melbourne.

Agreements and Contracts – Businesses need to keep all contracts including insurance and financing, 5 years after their terms expire. All original signed copies of these contracts should be given to your bookkeeper to ensure that they are well kept and are organised. Your bookkeeper also needs to have a copy of the list of all your business’ creditors and debtors at the end of each year.

Lease Agreements – For businesses renting an office space in Melbourne, they are obligated to keep the lease agreement or document. This is to ensure that in case of an argument or dispute between the businessowner and lessee or other individuals related to the business, the businessowner can easily retrieve these documents for reference purposes.

Business Permits and Licenses – Bookkeepers in Melbourne can determine the permits, licenses, and registrations required by both federal, state and local governments through the by utilising the Australian Business License and Information Service or ABLIS. It is imperative for every business ensure that these documents are safely stored.

Employee and Staff Information – Employee data includes recruitment data, wages or payroll records, medical records, taxes and deductions, as well as performance evaluation. A bookkeeper only handles the payroll records of the employees, while the human resource team handles the rest of the records. If their employees are paid on hourly basis, it is vital for the businessowner to keep track of the employees’ working hours.

Safety Records – Businesses are required by the law to keep their workplace safe for employees and clients. Entrepreneurs in Melbourne are required to keep these records, since these can be used to determine and control the risks. They can also be used to enhance the occupational well-being, health and safety of all staffs and employees.

Industry Specific Records – Aside from all the documents and records which have been previously mentioned above, there are still other records related to the industry that a business is in, which the business needs to safely store. For example, a construction company needs to store documents such as blueprints, drawings, maps and safety plan that they are using during construction.

MANAGING BUSINESS RECORDS

It is crucial for a small business in Melbourne to have a solid record keeping system to ensure that all of their company records are safely stored. It is best to leave this matter to a bookkeeper, who has the skill and experience, and who will meticulously maintain these records, so that the entrepreneur can focus on other vital parts of the company. 

For every entrepreneur in Melbourne, it is vital to meet all legal requirements in order to operate the business. Having substantial proof that you meet these requirements will help your company avoid losses.

An experience bookkeeper in Melbourne can help entrepreneurs set up a solid and secure recordkeeping system that can store and provide hard and soft copies of important documents. It is important for a businessowner to have access to all the information and documents. To ensure that you don’t lose any necessary data, it is highly recommended to save these files to a cloud-based bookkeeping system, so that in case the computer gets damaged beyond repair, you can still access these files through other devices.

A skilled bookkeeper in Melbourne can customise a bookkeeping software to ensure that it fits the specific requirements of your business. Many of the manual record keeping tasks can also be automated. Your bookkeeper can even provide the most suitable cloud-based bookkeeping software for your business in Melbourne. With this system, you have total control of all the events in your company and you can monitor all updates in real-time.

CONCLUSION

Record keeping plays a vital role in managing and operating a business in Melbourne. It paves way for business to avoid and/or resolve financial and legal challenges. This is one of the main reasons why bookkeeping companies in Melbourne ensure that all related records of the business are always up-to-date and safe.

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