Keeping accurate and up-to-date financial records is a crucial part of managing a successful business. Overlook it at your peril!
Reliable record keeping involves the collection and organisation of financial documents such as receipts, invoices, bills and cheques. You will have to be vigilant and apply method to what is usually considered madness in order to stay on top of the piles of paper you will gather, however, it will make a lot of things easier in the long run.
Legally, as a business owner, you are required to keep correct and honest business records. These records will assist you in gauging the success of your business, serve as warning signs should financial issues be on the horizon, and prepare you in the event that your business is audited.
Bank Statements – Bank statements are important items to keep and may relate to the following items:
- Payment summaries;
- Credit cards;
- Cheque and deposit books as well as the cheque and deposit butts. The cheque and deposit butts should clearly state what the cheque was spent on;
- Petty cash books.
Invoices and Receipts – You should always ensure that you have an invoice or receipt for goods and services you provide or consume. When paying bills, regardless of how you choose to pay, it is important to retain a copy of the receipt. The same goes for invoices you issue to clients, suppliers and so on.
Employee Payments - Keep a record of all of the wages/salaries you pay to your employees, superannuation contributions and the monies withheld for tax. These will come in handy when fulfilling your Payroll Tax obligations. Company tax returns, contracts and agreements should also be kept on file. Lastly, it is important to maintain a cash book detailing daily sales, expenses and drawings.
Electronic storage is an effective way of filing and organising your businesses financial records. It may also be wise to make backups (in either hard copy or soft copy format) in the event something unfortunate happens to the first copies. You do not want to run the risk of losing your financial records.
Remember to keep your financial records up-to-date. Although it may seem time consuming, try to remember that it is much quicker and easier to organise your financial records regularly than it is to sort through several month’s worth of disordered documents at the last minute. Tax time would surely be a hair-pulling nightmare for you and your accountant.
If you feel that your financial record keeping needs an overhaul or would simply like some expert advice, feel free to contact The Quinn Group. We’ve had years of experience in Tax, Accounting and Bookkeeping. Call us on call us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to get in touch with one of our professionals.