Record keeping in the wholesale industry

This fact sheet sets out what records you need to keep for your daily business transactions if you operate a small business in the wholesale industry.

What does a typical wholesaler record keeping system look like?

Income records

• Issue pre-numbered sales invoices based on customer order and stock despatched.
• Update inventory records to maintain efficient control of your stock levels.
• Staple copy of invoice and customer order together and file under customer name.
• Adjust sales and inventory records to account for returned goods to ensure sales and inventory records are accurate.
• Total actual sales, which occurred during the billing cycle (for example, monthly) and consolidate into sales statements.
• Issue sales statements to customers requesting payment and file under customer name.
• Update and summarise income into your cash receipts book regularly, paying special attention to discounts/credits provided to customers for early payment.
• Perform bank reconciliations between bank statements, deposits and cash receipts book at least monthly.
• Maintain a filing system to keep track of paid and unpaid accounts.
• Keep records of any elections or estimates made.

Expense records

• Prepare a pre-numbered purchase order in triplicate and forward a copy to the supplier, one to the stores department for receiving purposes and another copy to the accounting department to be matched with supplier's invoice. Other copies may be required to be sent to other departments depending upon the size of the business.
• Receive invoice for goods ordered and check against purchase orders and stock received to ensure charges are correct.
• Update inventory records regularly to maintain sufficient stock levels.
• File invoices, with corresponding purchase orders, under supplier's name.
• Reconcile vendors' statements (usually monthly) against invoices received taking into account any discounts available.
• Record payments to contractors in a secondary record such as a cash payments book. You will need a valid tax invoice if the contractor is registered for goods and services tax (GST) and you wish to claim an input tax credit.
• If a supplier (including a contractor) does not provide you with an Australian business number (ABN) you must withhold 46.5% from the payment. Otherwise you can ask for a Statement by a supplier (NAT 3346) and you should keep a copy for your records.
• Make payments of expenses by cheque or bank transfer. This helps keep track of payment of expenses.
• Maintain separate bank accounts for business and personal use to avoid misclassification of business expenses.
• Use a petty cash system to keep track of minor cash expenses.
• Keep documentary evidence to substantiate business expenses. For example, you may need to show how you calculated the business use of your motor vehicle expenses by keeping a log book or other type of documentation depending upon what method you choose.
• Update and summarise expenditure into your cash payments book using cheque butts and invoices regularly.
• Perform bank reconciliations between payments, bank statements and cash payments book at least monthly.
• Keep records of any elections or estimates made, for example, private use of business assets or goods.

Employee records

• Ensure a Tax file number declaration (NAT 3092) is completed for each employee when they commence employment. One copy is retained for your record and the other copy forwarded to the Tax Office.
• Make payments of wages by cheque or bank transfer. This helps keep track of your wages expenses.
• Record payments to employees in a wages book on a regular basis.
• The wages book should include such details as:
• name of employee
• hours worked
• pay rate
• gross payment
• net payment
• amount withheld, and
• superannuation contributions paid.
• For superannuation guarantee payment purposes, records need to show for each employee/contractor:
• name of superannuation provider
• amount of superannuation paid and how you worked out that amount (also keep records of any information that helped you work out the amount of superannuation you paid - this may include advice from trustees of superannuation funds to which you're making payments)
• dates when contributions were made, and
• if you ever incur a superannuation guarantee charge, you also have to keep records of the amount you paid and how you worked out that amount.

The records you have to keep may differ depending on whether or not you pay superannuation under an award. This may include reporting your superannuation payments on your employees' payslips. For more information, visit www.workchoices.gov.au

• For choice of superannuation fund purposes, you need to maintain records that show you have offered your eligible employees a choice of superannuation fund. These records include:
• evidence that shows you provided the Standard choice form to all your eligible employees
• the written information your employees provide when they nominate a fund
• receipts or other documents issued by the fund showing you have made superannuation payments for your employee to their chosen fund
• confirmation that your fund meets the insurance requirements, and
• details of employees who do not have to be offered a choice of superannuation fund.
• For fringe benefits tax purposes you need to keep records that show:
• the taxable value of each fringe benefit provided to each employee
• the method of allocating the taxable value of a fringe benefit provided to two or more employees for reportable fringe benefits purposes, and
• that 100% of the taxable value of the benefits (other than excluded fringe benefits) has been allocated to employees in their payment summaries.