Digital record-keeping can help businesses meet their super, tax, and employer obligations.
What are the Advantages of Digital Record Keeping for Businesses?
For instance, if you have a bookkeeper in Melbourne handling all your financial transactions, they may prefer to use bookkeeping software to ensure accuracy in your business books. There are various benefits of keeping your financial records digitally. If you use bookkeeping software for record-keeping, it may help you:
- Simplify your accounting practices and save time so you can focus on your business.
- Automatically calculate tax, wages, super, and other amounts, including:
- Develop reports and summaries for income tax, GST, fringe benefits tax (FBT), and taxable payments reporting systems, as needed.
- Be ready to file your tax and super obligations, including your business activity statements (BAS), tax return, and taxable payments annual report (TPAR) if you are a business that is required to
- Send some information to the ATO online, for instance, your activity statement.
- Meet your legal Single Touch Payroll (STP) reporting obligations.
- Back up financial records using cloud storage to keep your records safe from fire, theft, or flood.
- Keep track of business expenses, income, and assets, as well as calculate depreciation. This information can be used by your accountant Melbourne during tax season.
Digital Storage of Paper Records
You can store and keep your paper records digitally. The ATO accepts images of business paper records on a digital storage medium, provided the digital copies are clear and original reproductions of the original paper records and meet the 5 rules for record-keeping. After saving an image of your original paper records, you don’t need to keep the paper records unless a specific law or regulation requires you to.
However, if you enter information (for instance, supplier information, amount, GST, and date) from digital or paper records into your accounting software, you still have to keep a copy of the actual record, either on paper or digitally. Some accounting software may do both your accounting and record-keeping.
Providing the ATO with Copies of Records
If the ATO asks you to see copies of records you maintain digitally, you can provide either printed copies or digital records. The ATO may also ask you for documentation from your computer regarding your record-keeping system (for instance, information about your record destruction procedures and regular back-up) or ask that you provide the ATO with paper copies.
eInvoicing Storage
Irrespective of your eInvoicing system or software, your business needs to determine the best option for storing business financial transactions. You should:
- Ensure that your process meets the record-keeping requirements
- You can talk to your business adviser if necessary.
How to Choose the Right Record-Keeping Software?
You need to choose record-keeping software that:
- You can understand and work easily
- Allows you to meet your record-keeping requirements
- Allows you to report digitally to the ATO.
If you have a registered tax or BAS agent, they will also recommend that you choose software that is compatible with your business needs. Make sure the software you choose will meet your business’s requirements now and in the future. You need to consider what functions you need your software to do, for example:
- record refunds, sales, and exchanges (per employee, over a period of time)
- monitoring and managing stock, customers’ orders, work in progress, jobs or other task management requirements
- produce invoices and receipts
- payroll requirements, including annual leave, wages, and long service leave
- Single Touch Payroll reporting obligations
- Monitor money taken from your business
- manage multiple bank accounts or businesses
- deal with foreign currency
- Do budgets or forecasting cash flow
- Get regular reports
- back-up processes and security.
It’s a good idea to review daily whether your software is staying up to date with the functions you need to:
- Run your business as it changes and grows
- interact with the ATO, for instance, taxable payments annual reporting, single touch payroll
- Take up new digital opportunities as they become available.
If you use a registered BAS or tax agent, they can advise you on things that your software must be able to do to ensure you can meet your super, tax, and employer obligations, including any recent changes to the law.
Conclusion
If you run a business, you can prefer using digital records for record-keeping. You can also engage a bookkeeper for reliable bookkeeping services to ensure accurate records. A bookkeeper can advise you on the right bookkeeping software so you can be sure to meet your tax, super and employer obligations.