Filing is certainly a job that the majority of business owners procrastinate over.
As the pile grows, the motivation to put each piece of paper where it belongs decreases.
A business owner might ask themselves:
“Is it really a problem?
“I know where everything is, it’s my system even if it is a heap of paperwork scattered all over my desk and floors.”
Failing to have a filing system in place that allows you to find documents when you need to, is not a system.
Your accountant asks for a copy of your business registration or a trust deed, can you locate these quickly within 1 minute?
The ATO has selected your business for a “cash economy” audit.
They require three months of your invoices, quotations, receipts, bank statements and credit card statements. You must support each and every transaction with a receipt or docket. Added onto that they want twelve months of your personal spending divided into 3 pages of detailed information.
Would you have filed and kept all your receipts, bank & credit statements to supply this type of information?
This is something you may be saying in your mind as you read this.
You should never assume that if you outsource your bookkeeping to a bookkeeper, their duties include filing for you.
Onsite or online, a bookkeeper will only perform the duties you pay them for.
Most businesses pay a bookkeeper to perform data entry, tax coding, bank reconciliation and BAS lodgement.
Filing is not a complimentary service they throw in, unpaid.
Even if you have accounting programs like Xero, Quickbooks or MYOB with the ability to scan and attach receipts to every transaction. The process of scanning receipts takes time. If you pay your bookkeeper only a small monthly retainer to code, reconcile and lodge your BAS, this token amount may not include attaching receipts.
Filing is an important area that every business needs to have organised and well maintained. Not just for your own peace of mind, but it is also a Australian Taxation Office requirement that you do so!
What does the ATO say about keeping tax records?
Click the links below.
Paper receipts fade or can be misplaced or damaged in storage, keeping digital records works best for small business owners. How can you best accomplish this process? There are many options available that a business can use, both free and paid.
You can scan and save receipts to Dropbox using your smartphone app [FREE]. Which will store your receipts in a folder online, but this will not allow you to produce a report for the Australian Taxation Office or calculate your Business Activity for you.
You can scan and save a transactions using online cloud accounting like Xero which will allow you to attach the original receipt using their smartphone app. However, you will need to add in the details like the supplier, date, amount and what expense category it belongs to, then press save.
Or you can automate the process or receipt records by using an add on like Receipt-Bank which will communicate with other programs like Xero, Quickbooks or Myob by your bookkeeper creating rules. Data entry is as easy as taking a photo using the smart phone app and clicking submit.
As you can see, there are many options you can choose from. Which one will suit you?
It will come down to you, how you work and what amount of effort you are willing to make to ensure your record keeping is accurate and up to date.
If you would like to discuss which option suits you and your business, please feel welcome to contact Amanda on 0423463721 or contact her via calendly for your FREE 30 minute consultation.
BAS Agent and Bookkeeping