BASIC RECORD KEEPING REQUIREMENTS FOR YOUR SMALL BUSINESS

Record keeping is a quintessential requirement for every small business to keep the paperwork organised, streamline the cash flow, monitor the bottom-line for making vital decisions, and influencing money lenders. It is also a legal obligation to maintain financial records, employee records and documents related to fringe benefits and capital gains for all enterprises in Melbourne.

It assists in timely report submissions and tax filing and effortless management of the information of the workforce. Thus experienced bookkeeper in Melbourne are highly sought-after for the copious amount of work covered by them in a structured and controlled manner.

Let us take a look at all the record keeping requirements for a small business which are efficiently handled by professional bookkeepers

FINANCIAL RECORD KEEPING REQUIREMENTS

According to the law, every business must explain all the financial transactions taking place in the organisation either electronically or on paper in English or any other language that can be translated.

Most of these records need to be preserved for five years, and some are to be kept for even longer. If you are unable to maintain these records, you become liable to penalties which will be slapped on your business in Melbourne by the ATO. So here is a list of the financial records that are stored safely by the bookkeeper.

  • Invoices and Receipts of Sale – These must include all sales invoices and the receipts for providing goods and services as well as cash sales and cash register tapes.
  • Invoices and Receipts of Purchase – These consist of records of purchases made by the business and payment of bills including payments made for utilities.
  • Staff and Wage Expenditure – You must save all the details of the salaries and wages paid to employees and payments made to other organisations in Melbourne on behalf of your workers, such as tax deductions and superannuation.
  • Basic Accounting Details – Every business in Melbourne must have records of their financial statements, such as profit and loss statements and balance sheets prepared and updated by their bookkeepers.
  • Tax Reports and Returns – Your bookkeeper should have the record of the tax returns and reports lodged annually, including PAYG withholding annual reports, GST annual return, BAS, etc. Keeping the current scenarios in mind, you will have to maintain the records of the new tax measures introduced for COVID-19 affected businesses.
  • Banking Details – The bank account details of your business and credit card statements should be saved in the bookkeeping system. Make sure that the personal account of the entrepreneur is separate from the business account to avoid confusions with transactions.
  • Inventory and Asset Records – The details of the stock on hand at the end of the financial year must be stored safely, and the information related to the assets purchased and improved for the calculation of capital gains and loss.

BUSINESS RECORD KEEPING REQUIREMENTS

While the financial records are requested by the ATO, there are other government obligations in Melbourne which require safeguarding a plethora of staff and employee records. The records must be protected even if you sell or shut down your business as you might need them to meet government regulations.

These records must be updated every day by the bookkeeper so that nothing misses the eye of the entrepreneur. You can also take advantage of the record keeping evaluation tool to identify the records that need to be conserved. Here is a list of the requirements in Melbourne.

  • Contracts and Agreements – All the business contracts, such as financing and insurance, must be preserved until their term ends and for another five years. Your bookkeeper must have the original signed copies of these important documents. They should also have the complete list of the debtors and creditors at the year-end.
  • Lease Agreements – If you have a rented office space in Melbourne, then you must keep the lease document safely so that you can refer to the terms and conditions in case of an argument or dispute. Like other contracts, the lease must be saved for another five years after it has ended.
  • Licenses and Permits – Your bookkeeper can utilise the Australian Business Licence and Information Service (ABLIS), which helps the entrepreneur to identify the required licenses, permits and registrations needed by the local, state and federal governments. All these must be stored safely.
  • Employee Information – It must have all the information about the association of the employee with the company, such as payroll records, taxes and deductions, recruitment data, medical information, performance evaluation. While the payroll data is managed by the bookkeeper, the rest of the information is accumulated by the human resource team. You must also have a record of the working hours of your employees who are paid hourly.
  • Safety Records – Entrepreneurs in Melbourne must have records of workplace safety, which have been put in place to assess and control risks and improve the occupational health and well-being of the workers.
  • Business Specific Records – Besides all of the above, different industries have to maintain records that are mainly related to their business activity. For example, a food business will have to maintain records of the food safety plan being utilised by the outlet.

HOW TO MANAGE THE RECORDS

Every small business in Melbourne must have a robust record keeping system that is professionally and diligently maintained by the bookkeeper so that you can concentrate on other important work. It is essential to meet the legal requirements for running a business and being ready with proof of every transaction to avoid any losses.

Your bookkeeper will help you in setting up the record keeping system which can be on both paper and computer. The entrepreneur must have access to this data, and you should have it saved in the cloud so that it can be retrieved if the hard disk of the computer gets damaged.

It is easier to use accounting software which is tailored to the needs of your organisation and automates a lot of the manual work. Your bookkeeper can help you to get the best cloud-based accounting software for your business in Melbourne so that you can keep track of all the updates in real-time.

CONCLUSION

Record keeping is an essential part of managing and running a business without facing any legal and financial challenges. Thus bookkeeping companies in Melbourne make sure that all your business and financial information is updated and secure at all times. 

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