Sydney-Bookkeeping.Com.Au

As bookkeepers servicing the suburbs to Liverpool and Bankstown area, we are often asked: “What Bookkeeping Records Do I Need?”.

When a business gets started, the first thing you should do is to make sure that you keep track of all the costs involved in setting up you business, so that you can set up a book-keeping system correctly from day one.

If you need some help in establishing your bookeeping, then contact us right now.

What’s become a nightmare for her, is a bookkeeper’s dream

A new Padstow bookkeeping client has been running her graphic design business for over a year operating on one bank account for everything. She’s made her book-keeping become a nightmare for her by using the same bank account for both her personal and business expenses. That makes our job as mobile book keepers quite an interesting challenge. We have to ask her which items on her bank account relate to business, and which are personal.

What Bookkeeping Records Do You Need?
The type of business you operate affects the type of records you need to keep for ATO purposes. You should have your bookkeeper set up your books using an accounting method that clearly shows your income for your selected tax year.

From a bookkeeping viewpoint there are a few basic bookkeeping matters that every small business owners should focus on to reduce the fees you will otherwise have to pay your bookkeeper or accountant

Depending on your business, whether you are located in Bankstown or Liverpool, you should get into a habit of keeping records daily

• Identify the source income that you’ve received
• Ensure you keep your dockets for expenses, and a note of any petty cash expenses
• Keep a record of all your assets

The Australian Taxation Office requires you have supporting documentation such as invoices and receipts for all transactions incurred in running your business such as purchases and sales. You might generate invoices electronically using an accounting software package such as MYOB or Quickbooks, or you may hand write your invoices using an invoice book

The ATO do not like you putting a lump sum amount on invoices for amounts above $1000. You need to itemise the account into, say $300 for labour and $700 for materials

The Australian Taxation Office (ATO) requires you to keep business records:

• for five years after they are prepared, obtained or the transactions completed (whichever occurs later), and
• in English, or in a form that the ATO can access and understand in order to determine your tax liability.

It is important to retain these documents because they support the entries in your books and on your tax returns. You should keep them in an orderly fashion and a safe place.

Purchases
Purchases are items that you buy maybe as raw materials, that you then on sell to your customers. The supporting documentation may be suppliers invoices, or dockets from cash / credit card purchases made for the business

Expenses
Expenses are costs incurred in running your business, such as telephone, electricity, rent etc The supporting documentation may be utility bills invoices, or dockets from cash / credit card

Petty Cash
It’s a good idea to ensure that you have petty cash for staff to make small purchases for items such as milk, or postage stamps etc. A good policy is that if your staff cannot produce a docket, then you should not reimburse them for monies spent.

Travel
Depending on how your accountant advises you, there may be opportunities to claim your fuel expenses in running the business from Panania or Picnic Point, or wherever your business is located. You may be able to claim for travel to meet a client at Bankstown or to Liverpool etc.

No problem in buying your Revesby client a gift at Christmas time, just keep the docket, and ask your accountant if it’s a legitimate claim.

Travel, transportation, entertainment and gift expenses require some extra documentation to deduct them as business expenses. For example, for your bookkeeper to deduct the cost of taking a client to lunch in Canterbury, you should record the name of the client, the purpose of the lunch and topic discussed at the lunch.

Contact us for more information

PS – We are not registered tax agents and cannot give advise in such matters. You need at ask your accountant regarding what you can and cannot legitimately claim.