Bookkeeping Records for an ATO Tax Audit

The Australian Taxation Office or ATO, requires you by law to keep accurate records of your business.  These records need to be in English or be easily understandable by the ATO and you have to hold on to those records for at least five (5) years after they are prepared, obtained or the transactions completed (whichever occurs later). It’s a legal obligation to follow these rules closely and if you are found in non-compliance, you could face penalties.

The best way to make sure all of your records are in order is to hire a bookkeeper to do this for you. With professional bookkeepers, you business will never have to worry about paperwork because these bookkeepers will have it all organised and completed for you.

Hiring a good bookkeeper can make it much easier for you to:

• Keep track of your business performance.
• Complete your BAS statements.
• Give you an easy way to show your finances to lenders and investors.
• Easily make business decisions such as buying and selling because you’ll know exactly how much you can pay out and are making.

When you have someone handling all of this for your business, you will have a lot more free time you can use to concentrate on improving your existing business, branching out, and making new contacts. For most businesses, a bookkeeping service is a necessity and you will wonder how you ever managed without one.  Some of the primary responsibilities you will be passing on include receipts, financial statements, expenses, tax return preparation, and keeping records well organised.

Receipts can be the bane of a small business owner. It just won’t do to keep them all piled in a folder somewhere until you need them. The bookeeper will be able to sort out both personal and business expenses and keep them completely separated so you can accurately determine what it takes to keep your business running smoothly.

Financial statements must be prepared accurately and quickly. This is especially important with balance sheets. Balance sheets need to be accurate so you know exactly what is making you the most profit and what is causing loss.

Expenses need to be legitimate for the ATO to recognise them. Any deductions you are making will need to be completely backed up with proof and a bookkeeper can make sure all of the documents needed are properly organised when the time comes for an audit.

Tax returns are an extremely important part of any business and your bookkeeper will be able to accurately track your expenses, income, and any credits you can use for your tax return. You may be able to save a lot more money this way than by doing it yourself.