Set up a record keeping system

Evaluate your record keeping skills

Use the Australian Taxation Office (ATO) record keeping evaluation tool to find out what records you need to keep and assess how well your business is keeping records.

Keep track of your procedures

Make note of the procedure you use for filing your records. This is so if someone has to do it for you they know what to do. As your business grows, you might want to hire a bookkeeper for this.

Use our financial policies and procedures manual template if you don't have one already.

Backup your records

Create regular backups of your records in line with your financial policies and procedures. It’s a good idea to check your backups each time to ensure that you haven’t lost any data.

Records about your finances

You're required by the ATO to keep business records for at least 5 years, in plain English and in a way the ATO can access if they need it.

For any transaction that has a financial element, the ATO requires you to keep:

  • copies of invoices and receipts you provide for goods sold or services rendered
  • invoices for goods or services that you buy or bills you pay such as rent, rates, insurance and licence fees
  • payments to employees and to other organisations on behalf of employees, such as super funds and PAYG tax
  • financial statements, including profit and loss statement and balance sheet
  • tax return information
  • bank account and credit card statements
  • end of year stocktake records and assets register

Budget and cash flow records

Good practice records management involves preparing and using both the profit and loss budget and cash flow forecast.

Records about your business and employees

In addition to your ATO financial records requirements, other government departments require you to keep records relating to your business and employees.

When setting up your record keeping system, keep:

  • contracts, insurance agreements and other legal documents
  • your lease if you're renting
  • licences and permits
  • employee records, including time sheets and payslips
  • safety records, such as a risk assessment for occupational health and safety
  • any other records that are required for the operation of your business (for example, a food safety plan for a cafe owner)