In today's business world, it is imperative that companies
have a good way to record all transactions. Not only will it help you
understand the financial health of your business, but it will also keep you
legally compliant with the Australian Taxation Office (ATO) and the Australian
Securities and Investment Commission (ASIC).
Requirements of the ATO
Company data can be kept on paper or in electronic form. The
ATO recommends using electronic formats when moving to electronic reporting and
Single Touch Payroll (STP) to report tax and super liabilities.
Electronic record keeping should make some tasks easier and
save time once you set up your system. Usually, electronic record keeping is
sufficient for the ATO unless there is a law or registration that requires a
paper or paper version. You must check the legal requirement to keep hard
copies for the legal system.
The ATO accepts an electronic version of a paper record, provided
it is a true and clear production of the paper record and meets record keeping
requirements. If you have kept an electronic copy of your paper version, you do
not need to keep the paper version.
Record Keeping Tip: Keep your data in a safe, secure place
guarded by passwords and back it up to cloud-based storage and a hard drive in
the event of a computer failure. The ATO recommends that you have access to
your hard drive and that you manage the process of entering and transmitting
information.
How long do you need to keep data?
In general, you should keep your records for 5 years. The
data you must keep comes from when you initiated or completed the transactions
(or actions to which they relate). However, if your company owns assets, you
must keep your records for more than 5 years. The Australian Securities &
Investments Commission (ASIC) requires companies to keep data for seven years.
Visit Also: Accounting and Bookkeeping Services in Australia
Manual Vs electronic accounting
Manual systems use a range of books or ledgers that can be
obtained from a newsstand or office supply store. They are inexpensive to set
up, less likely to be damaged, and are easy to use and maintain.
The advantages of electronic systems are that they take up
less physical storage space, calculate amounts automatically, are easy to
generate reports and easy to back up. Electronic formats include accounting
software, web-based systems and spreadsheets.
Software
Accounting software can be purchased out-of-the-box or can
be adapted to your usage and records your transactions, calculates your GST,
updates ledgers, prepares financial statements and generates invoices. The ATO
recommends that Australian companies use software that complies with Standard
Business Reporting (SBR).
Web-based
Web-based software programs update your books from anywhere
and provide a cloud-based storage system for your transactions. They can be
cheaper than a digital option, but may present security risks.
Point-Of-Sale Systems
As your business grows or if you've changed the business
structure, you may need to update or change your system to a point-of-sale
(POS) system. These systems can automatically adjust sales income and inventory
records, create receipts, invoices and tax invoices, and process EFTPOS and
credit and debit card sales. These systems can be expensive and the help of a
professional will help you make your decision.
It can be difficult to set up your administration without an
accounting background. If you need help getting started or have outgrown your
current processes, NUMBERSPRO can help you with your business administration
and set up the best system for you.
For more information visit website www.numberspro.com.au
