Why Record-Keeping Matters
Good record-keeping isn’t just about being organised — it’s often a legal requirement. Tax authorities expect you to maintain accurate financial records, and if you’re ever audited, those records are your defence. The better your records, the smoother the process.
What Records to Keep
Income Records
- All invoices you’ve issued — every sale, whether paid or not
- Bank statements showing deposits
- Payment receipts from clients
- Cash register tapes if applicable
Expense Records
- Receipts for all business purchases — even small ones
- Bills and invoices from suppliers
- Bank and credit card statements
- Mileage logs for business driving
Employment Records (If You Have Staff)
- Pay records and payslips
- Tax withholding documents
- Employment contracts
- Superannuation/pension/retirement contributions
Asset Records
- Purchase receipts for equipment and property
- Depreciation schedules
- Sale or disposal records
Tax Records
- Previous tax returns (personal and business)
- Tax payment receipts
- GST/VAT/Sales tax returns
- Correspondence with tax authorities
How Long to Keep Records
Retention periods vary by country, but here are general guidelines:
| Record Type | Keep For |
|---|---|
| General financial records | 5-7 years |
| Tax returns | 7 years (or indefinitely) |
| Employment records | 7 years after employment ends |
| Asset records | Life of asset + 7 years |
| Contracts | 7 years after expiry |
When in doubt, keep it longer. Storage is cheap; missing records during an audit are not.
Digital Record-Keeping Best Practices
Paper records fade, get lost, and take up space. Going digital is faster, safer, and easier to manage.
Scan and Store
- Photograph receipts immediately. Use your phone’s camera the moment you receive a paper receipt.
- Save email receipts in a dedicated folder or attach them to the transaction in your bookkeeping system.
- Use cloud storage. Don’t rely on a single hard drive. Cloud backups protect you from hardware failure.
Organise Consistently
- Use a clear naming convention. Something like “2024-03-15_Office-Supplies_$45.50” makes files easy to find.
- Create a folder structure that mirrors your expense categories.
- Tag or categorise as you go — don’t save it all for later.
Automate Where Possible
- Connect your bank account to your bookkeeping software for automatic transaction imports
- Set up automatic receipt capture if your tools support it
- Use recurring reminders to review and file records monthly
Preparing for Tax Time
If you keep records throughout the year, tax time becomes a simple review rather than a frantic scramble:
- Monthly: Reconcile bank statements, categorise transactions, attach receipts
- Quarterly: Review your financial reports, file any required tax returns
- Year-end: Run your annual reports, gather everything your accountant needs
What Your Accountant Needs
- Profit and loss statement
- Balance sheet
- Bank statements for the full year
- Receipts for all deductions
- Details of any unusual transactions
- Prior year tax return (if switching accountants)
Fastbooks keeps all your records in one place — transactions, invoices, receipts, and reports — so when tax time arrives, you can export everything your accountant needs in minutes, not days.