As swiftly as we'd like to push forward into the future, it's important to remember where we've come from. When it comes to managing your business - whether big or small - attention to detail and keeping clean records in the moment will help all the pieces fit together further on down the road.
Tax Basics for Small Business, an essential document composed by the ATO, outlines the following tips as strong foundational points for effective record keeping:
Set up a good filing system for your records
This will help you keep the right records and have them available when you need them. Get into a routine and do your books regularly.
Fill in cheque butts in detail
Write enough information on your cheque butts so that you (or your accountant) can understand what the payment was for later on.
Clearly separate business and private expenditure
We recommend you keep your business and personal banking in separate accounts. If you have a company or trust, it is a legal requirement. Avoid paying personal expenses from your business account.
Cross-reference your transactions
When you pay bills, write the invoice number on the cheque butt, and the cheque number on the invoice. This will help you track down information if you have any problems later.
Regularly reconcile your cash book entries with bank statements Reconciling your accounts helps find errors or omissions. It could save your accountant time, which will save you money.
Avoid keeping cash register tapes
If you use a cash register, you can discard your cash register tapes after one month, provided you keep Z-totals and they have been reconciled with actual sales and banking for the period. Otherwise, you must keep the full rolls for five years . The Z-total is the figure printed by the cash register showing the total of all recorded takings for a day.