Bookkeeping for small business


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This presentation contains essential bookkeeping tips for small business in Australia. Brought to you by W Advisory, your Sydney Accountant and Tax Specialist. Visit our website at

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Bookkeeping for small business

  1. 1. Based on tax office’s guidelines for small business operators
  2. 2.  This presentation explains what businessrecords you need to keep and outlines a basicbookkeeping system.
  3. 3. Legal requirements -- By law, you must keepbusiness records: for five years after they are prepared, obtained orthe transactions completed, whichever occurslatest in English or in a form that we can access andunderstand in order to work out the amount of taxyou are liable to pay.
  4. 4. Other reasons for keeping good business recordsare to: make it easier to complete your activity statements monitor the health of your business help you to manage your cash flow demonstrate your financial position to banks orlenders make best use of your tax adviser show the basis for any amendments you need tomake to activity statements or tax returns
  5. 5. ATO has developed an electronic tool to help youevaluate the record keeping needs of yourbusiness.You can use this tool if you are: thinking about starting a business in business and responsible for keeping the businessrecords responsible for managing the records of smallbusinesses; for example, you are a tax agent or abookkeeper.For more information, download the record keeping evaluation tool from ATOwebsite at
  6. 6. As with paper records, you must keepelectronic records: for five years after they are prepared, obtained orthe transactions completed, whichever occurslatest in English, or in a form that we can access andunderstand order to work out how much tax youare liable to pay.
  7. 7. In these instances, ATO can allow a deduction tobe claimed for certain expenses if either of thefollowing apply: you have a complete copy of a lost or destroyeddocument ATO is satisfied that you took reasonableprecautions to prevent the loss or destructionand, if the document was written evidence, it isnot reasonably possible to obtain a substitutedocument.
  8. 8. If you are carrying on a business, you need tokeep records explaining all transactions thatrelate to your tax affairs.These records include: sales and expense invoices sales and expense receipts cash register tapes credit card statements bank deposit books and cheque butts bank account statements.
  9. 9. As well as records of income and expenses, youmay need to keep the following specific incometax records (if they apply to your business) for eachfinancial year: motor vehicles companies and trusts sole traders and partnerships debtors and creditors lists stocktakes depreciating assets CGT assets.
  10. 10. As a business operator, you have three main obligationswhen it comes to paying your employees: withhold according to the pay as you go (PAYG)withholding rules in relation to payments toemployees pay super contributions to a complying super fund orretirement savings account on behalf of eligibleemployees, directors and contractors, and offereligible employees a choice of super fund provide payment summaries for salary, employmenttermination payments, and reportable fringe benefitsamounts.
  11. 11. Under the PAYG withholding system, you mustwithhold amounts from payments such as: salary or wages to employees remuneration to company directors retirement payments, termination ofemployment payments, annuities, and benefit or compensationpayments.
  12. 12.  FBT is a tax paid on certain benefits youprovide to your employees or youremployees’ associates (typically familymembers) in place of, or as well as, salary andwages. FBT is separate from income tax and is basedon the taxable value of the various fringebenefits provided. The FBT year begins on 1 April and ends on 31March.
  13. 13. The first thing you need to do is to make sure the invoicesyou receive from other businesses contain all theinformation you need, especially tax invoices. Check that all invoices quote a valid ABN and, if they aretax invoices, that they contain all the requirements for atax invoice. Remember, you generally can’t claim GSTcredits for your business purchases unless you have a validtax invoice. Also, make sure the invoices you issue fromyour business contain the required information for a taxinvoice. Make sure you record enough information on the chequebutt-date, payee, and details of goods or servicespurchased, if you use cheques to make businesspayments.
  14. 14.  Record keeping for small business Download link on
  15. 15.  We are your Sydney Accountant andTaxSpecialist. We are based in Sydney, Campbelltown andPerth, ready to support small businesses in yourlocal area. Our services include: Accounting andTax Advisory Cloud-based Business Solutions MYOB Services
  16. 16. W AdvisoryPO Box 27, Macarthur Square, NSW, 2560Phone : 0410 491 591Fax : 02 8007