The Australian Taxation Office says businesses must keep records of transactions relating to their tax, superannuation and registration affairs as they start, run, sell, change or close the business. The exact records and retention period depend on the transaction and obligation.
1. Start with the entity and period
Write down which person or entity the records belong to and the dates being reviewed. If more than one entity is involved, keep each record set clearly separated.
2. Gather the source records
Start with documents that show what happened, when it happened, who was involved and the amount. Depending on the business, that can include:
- sales invoices, receipts and settlement reports
- supplier invoices and expense receipts
- bank and credit-card statements
- contracts, loan documents and asset purchase records
- payroll, superannuation and employee records where relevant
- earlier returns, statements and working papers that explain carried-forward figures
Do not create a clean-looking summary that cannot be traced back to source documents. Keep the link between the summary and the underlying evidence.
3. Separate business and private items
Mark personal transactions, transfers between accounts and payments involving owners or related parties. A short explanation saved at the time is usually more useful than trying to reconstruct the reason months later.
4. Explain exceptions while they are fresh
Flag refunds, cancelled invoices, unusual deposits, cash transactions, duplicated payments, large one-off purchases and anything that does not fit the normal pattern. Record who can answer follow-up questions.
5. Store records clearly and back them up
Paper and electronic records can both be relevant. The ATO accepts electronic copies in many circumstances when they are true and clear reproductions. Keep a reliable backup and use filenames or folders that preserve the entity, period and document type.
6. Prepare a short review note
Before handing over the records, add a one-page note covering:
- the entity and period
- where the records are stored
- what has been reconciled
- what is missing or still being requested
- unusual transactions that need discussion
- deadlines or decisions that depend on the work
This guide is general information only. Record-keeping rules and professional scope depend on your circumstances. Seek advice for your entity and transactions.