Good business record keeping is not only essential for legal reasons and company compliance, it’s part of good management. But your business uses so many different types of documents and probably completes a range of transactions each day, so it can be difficult to know which records you need to keep and why.
This is why you need the right information – and the right processes in place. The result? Good business.
There are many ways that keeping good business records can help you run your business:
As a business owner, you must keep a wide range of documents about your business. You may be asked to provide these documents to several government authorities, like ASIC, the FWO and the ATO.
The records that you need to keep must include information about:
These are many records that show how your business is performing financially. These documents may include invoices or receipts for goods or services your business has bought or sold, bank statements, a list of all the assets your business owns (and how much those assets have depreciated), business activity statements (BAS), tax returns, and documents that show what loans and credit arrangements your business has.
These include any formal documents that show what legal arrangements your business has entered into or that are required to run your business. These documents include any contracts your business has for loans, leases, rent or purchases, your business registration documents, insurance policies, minutes of board and shareholder meetings that have been held, and, if your business is a company, your company’s constitution.
Any documents about people who work for you and what they have done at work must be kept. These include their names, contact details, tax file numbers, superannuation details, payroll records, staff attendance records and rosters, and information about any injuries that have happened at your workplace.
Most businesses need to document how their business operates. This helps people who work for you and anyone else know what you do and how you do it. This includes health and safety plans, sexual harassment policies and your operating manual. These should also be given to people who work for you so that they’re aware of them. These documents also need to be updated whenever the law changes.
Depending on the type of business you operate you may have other records that should be kept. These may include details about your customers and what they have purchased from you, any customer complaints and how they were dealt with, any issues that you have had with other businesses, marketing and advertising activities, and any quotes or estimates that you have given to customers.
Keeping track of your records can be challenging – that’s why many businesses put in place special systems to help them. Your records must be kept:
As you can imagine, keeping paper records can take up a lot of space and may get damaged over time. But sometimes paper documents are required as evidence in legal proceedings or if there is an issue with electronic copies.
Electronic copies can be much easier to find, thanks to the wonders of digital technology, and don’t take as much physical space to store. There are even some apps that let you upload your invoices and receipts directly from your phone. Electronic records still need to be kept somewhere that you can access and control easily, and you need to make sure they’re backed up, just in case your computer fails or is corrupted.
It’s good to use software that meets the Standard Business Reporting requirements. They may even let you lodge some of the documents you need to provide government authorities online.
Australia has fairly strict laws about collecting, using and storing personal information. Sometimes this may seem at odds with record keeping requirements.
Generally, information is personal if it may identify someone. This could include their name, address, phone number and date of birth. This type of information could be on a wide range of documents that you need to keep, including customer invoices and employee details.
The privacy laws specifically allow businesses to keep personal information about their employees as long as it is about their current or past employment relationship. You do need to make sure that you keep this information private and confidential.
To meet your obligations under the privacy laws, make sure you put policies and training in place – so that everyone in your business knows how to look after this type of information. This may include making sure only specific people have access to this information and that you know where any copies are kept.
There are several different regulatory authorities that require you to keep documents and each expects you to keep them for different amounts of time:
If you’re concerned about the number of documents that your business needs to have and maintain, don’t worry, help is at hand. An accountant or bookkeeper can help you with your financial records and there are specialists who can make sure you have all the legal and employee records that you need.
If you need help with your business record keeping, get in touch with CCASA. We specialise in company compliance and make company compliance easy.
This information is general in nature and we recommend that you seek legal and/or accounting advice to make the best decisions for your business.
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