The Australian Tax Office (ATO) is homing in on small businesses failing to comply with guidelines regarding appropriate record keeping.

Findings from the ATO’s Protecting Honest Business campaign indicate that one of the leading factors for small business failure is poor record keeping practices. Small business owners are required to disclose particular information, and keep records of the following:

• Income tax records
• Income and sales records
• Expense or purchase records
• Year-end records
• Bank records
• Goods and services tax records
• Employees and contractors records
• Fuel tax records

With year-end approaching, employers should be mindful of keeping records such as lists of creditors or debtors, and expenses incurred buying, maintaining, repairing and selling business assets or stock. Worksheets must also be kept to calculate depreciating assets, stocktake sheets and capital gains tax records.

By law, all Australian businesses must keep records for a period of five years. These records must be in writing, either on paper or electronically. Dedicating time each week, fortnight or month to compile all the above-listed information will prevent you from incurring fines and potentially losing your business.

Pitcher Partners Newcastle and Hunter provide a bookkeeping service. For any assistance with bookkeeping please contact our office.