Record keeping for small business

Deciding whether you should keep electronic or manual records

You can record the information from your business transaction documents in a cash book, either electronically or manually.

Recording your transactions manually can be as simple as using an exercise book, but we recommend you buy a commercial cash book from a newsagent or a stationery shop.

To record your transactions electronically, you can use an electronic spreadsheet or a software accounting package.

There are various commercial packages available, ranging from simple systems to complex ones.

The advantages of an electronic record keeping package are that it:

helps you record your business transactions, including income and expenses, payments to workers, and stock and asset details
automatically tallies amounts and provides ready-made reporting
can produce invoices and provide summaries and reports for GST and income tax purposes
keeps up with the latest tax rates and tax laws, and rulings
allows you to report certain information, such as your activity statement, to us electronically (if the package meets our requirements)
requires less storage space
allows you to back up records and keep back-ups in a safe place in case of fire or theft
enables you to use your time more efficiently.

If you are planning to use an electronic record keeping package, you need to take into account that:

it may initially be more expensive to set up
you will need to know how to operate a computer and use the software
you will need to be familiar with accounting principles and understand how the software calculates and treats your information.

If you decide to go electronic, make sure you choose a software package that meets your business needs and our requirements. You may want to consult your tax adviser.

To check whether commercial tax-related software meets our requirements, search the product register at softwaredevelopers.ato.gov.au

Sections within Keeping good business records

Last Modified: Wednesday, 29 June 2011