Financial record keeping | Business Queensland (2024)

• Easily record business transactions, including income and expenses, payments to workers, and stock and asset details
• Efficiently keep financial records and requires less storage space
• Provides the option of recording a sale when you raise an invoice, not when you receive a cash payment from a client
• Easily generate orders, invoices, debtor reports, financial statements, employee pay records, inventory reports
• Automatically tallies amounts and provides reporting functions
• Keeps up with the latest tax rates, tax laws and rulings
• Emails invoices to clients, orders to suppliers, or business activity statement (BAS) returns to the Australian Taxation Office (ATO)
• Backs up records and keep them in a safe place in case of fire or theft

Having good accounting software or systems is important to keep your business running smoothly. The right system can help warn you if it looks like your business might run out of cash.

Make sure the software has standard business reporting (SBR) forms needed to report to the ATO (such as BAS statements) and meets Australian tax requirements.

Review what your business needs from accounting software before deciding which one to buy. Consider if you need software that can:

• calculate all payroll requirements (e.g. pay-as-you-go withholding, annual leave and long service leave)
• track stock, work in progress, orders, sales, and other task management requirements
• manage multiple bank accounts
• manage foreign currency transactions
• track separate financial records for each business or department within your business
• allow for interface with other IT systems including online payments, data spreadsheet packages and customer relationship management (CRM) systems
• keep detailed sales records on customers.

Free or paid software options

There are many software packages that allow you to successfully control records without needing accounting experience. There are free software packages available but make sure these meet your business's needs.

There are many commonly used purchased accounting systems used by small businesses that are billed monthly or purchased outright. Consult with your accountant, financial adviser or industry organisation to assist with identifying the most appropriate software package.

Software for Single Touch Payroll

All businesses must report tax and superannuation information directly to the ATO. This is known as Single Touch Payroll (STP). You should check that STP reporting is included in your accounting software.

The ATO provides a register of software products that support STP reporting, including low-cost options for micro employers.

SuperStream

You must use the ATO's SuperStream to pay employee superannuation guarantee contributions to super funds. This ensures money and data are sent electronically in a standard format across the superannuation system. Make sure your accounting software is compliant with SuperStream.

Understand your SuperStream requirements as an employer (including if you are self-employed).

Learn more about digital record keeping for businesses from the ATO.

• Less expensive to set up
• May be easier to use for correcting errors, as opposed to computerised ones that can leave complicated audit trails.
• Lower risk of corrupted data
• Less of a risk of data loss, particularly if records are stored in a fire-proof environment
• Problems with duplicate copies of the same records are generally avoided
• Familiarity with how accounting software calculates and treats your information isn't needed

• Sort and store all paperwork, receipts and payments by financial year.
• Keep all original documents and date all correspondence.
• Record all transaction dates and payment amounts.
• Save all online financial transactions by month and financial year in your inbox and in a separate folder on your hard drive.
• Backup all electronic records on an external hard drive or storage device other than your computer's internal hard drive.
• Capture all your income and expenses in statements from both your bank and credit card accounts.
• Request that all statements and bills be sent monthly, allowing you to reconcile all financial records each month.

Keep these records to meet basic taxation legal requirements.

Cash movement

• Cash receipts and cash payments
• Bank account (e.g. cheque books, deposit books and bank statements).

Sales

• Software records
• Invoice books
• Receipt books
• Cash register tapes
• Credit card documentation
• Credit notes for goods returned
• Record of goods used by the business owner personally.

Purchases

• Petty cash system (smaller cash purchases)
• Receipts
• Credit-card statements
• Invoices
• Cheque butts (larger purchases)
• Any other documents relating to purchases, including copies of agreements or leases

Keep these records to meet legal requirements and to accurately determine your tax position at the end of the financial year.

Stocktake

• Details of stock on hand at the beginning and end of the year, to work out whether the business has a taxable income for tax purposes

Debtors and creditors

• Details of all your debtors and creditors for the period—ask your accountant what you need to give them

Capital gains details

• Records of sale and asset purchase dates and agreements
• Disposal and proceeds received
• Details of commissions paid, legal expenses and improvements made to an asset
• Any other records relevant to how you calculate your capital gain or capital loss

Depreciation

• Original purchase agreements or tax invoices
• Depreciation schedule
• If applicable, the cost of transporting the items to your business and installation costs—to obtain tax deductions for depreciation (wear and tear) of assets

Expenses

• Cheque butts, receipts, cash register tapes, copies of statements and invoices, credit card documentation, details of payments by cash and log books.

Staff and wages

• Full details of wages, employment contracts, tax deducted, fringe benefits, superannuation and related matters such as sick pay and holiday pay.

Basic accounting records

• Stock records, accounts receivable, accounts payable, and other basic accounting records.

Agreements

• Sales and purchase contracts, and loan agreements
• Rental and lease agreements
• Franchise agreements and sale and lease back agreements
• trading agreements with suppliers
• Other legal documentation

Assets and liabilities

• List of assets and liabilities
• differentiate between current and long-term assets and liabilities.

Other documents

• Evidence of deposits with utilities, contracts with phone companies and registration of your business name.