Record keeping¶

Every figure on your Activity Statement comes from somewhere — a sale, an expense, the wages you paid, the tax you withheld. The records behind those figures are what you must keep. Good records make preparing your BAS easier, and they are there if a question ever comes up.

Why this matters¶

If the Australian Taxation Office (ATO) ever asks how you worked out a figure, your records are the answer. Good records also make each BAS quicker to prepare, and much easier to check or revise if you find a mistake. Missing records make all of that harder.

What you will learn¶

• Which records support your Activity Statement
• How long business records generally need to be kept
• The rules about English and electronic records

Understanding the concept¶

Your BAS records are the paperwork behind the numbers. The ATO says you need to keep all the records that support the amounts you report and claim — including your tax invoices, receipts, and your sales, purchase, wages and withholding records. In short, anything you used to work out a figure on the statement.

How long to keep them. The ATO says you generally need to keep most business records for five years. The five years generally starts from when you prepared or obtained the record, or completed the transaction it relates to, whichever is later. There are some situations where records need to be kept for longer, so it is worth checking the ATO's guidance if you are unsure.

What form they can be in. The ATO says your records must be in English, or be able to be easily converted to English. You can keep them electronically or on paper — the ATO accepts digital copies of paper records, as long as they are true and clear copies of the originals. Keeping records electronically often makes it easier to find things and to prepare your BAS.

Example¶

Sam runs a courier business and keeps every tax invoice and receipt in a folder in the cloud, scanned or saved as it comes in. When BAS time arrives, the figures are easy to pull together because the supporting records are already there. A year later the ATO asks Sam about a GST credit he claimed. Because Sam kept the tax invoice — well within the five years the ATO expects — he can show exactly what the expense was and how the figure was worked out. The records that felt like a chore to keep turned out to be exactly what he needed.

Common mistakes¶

• Throwing out receipts and tax invoices too early — the ATO generally expects five years.
• Keeping only bank statements — you also need the tax invoices and receipts behind them.
• Keeping records only in another language with no way to convert them to English.
• Relying on memory instead of records, which makes checking or revising a BAS hard.

How this works in myaccountant¶

Key points¶

• Keep the records that support your BAS — tax invoices, receipts, sales, purchases, wages and withholding.
• The ATO says business records generally must be kept for five years.
• The five years generally runs from when the record was made or the transaction completed, whichever is later.
• Records must be in English, or able to be converted to English.
• Records can be kept electronically or on paper.
• Good records make preparing and revising a BAS much easier.

Learn next¶

• Preparing your BAS
• Revising a BAS
• Authorisations and declarations

General information only — not tax, super or financial advice.