How Long do You Need to Keep Business Receipts?

April 16, 2024
minutes to read
Jelina Rosin
Table of Contents

You started your business with a dream, not a shoebox full of receipts! inefficient and unorganised record keeping can lead to nightmare scenarios: scrambling for documents at tax time, facing hefty fines from the ATO, missing out on money that's rightfully yours and even jeopardising your business's future.

No one wants that. This blog will help you answer all related questions in mind when it comes to record-keeping for businesses, helping you make informed decisions, stay compliant, and avoid stress.

Why Keep Business Receipts?

As a business owner, you're legally required to maintain accurate records for tax and compliance purposes. These records document your income, expenses, tax decisions, and calculations. The Australian Taxation Office (ATO) conducts audits to ensure compliance. Not having proper records can lead to penalties, so a good system is essential. Keeping a record of your receipts is essential and arguably the most important way to minimise tax.

What are the Benefits of a Record-Keeping System

  • Informed Decisions. Track your business health and make strategic choices based on accurate data.
  • Compliance. Meet tax and superannuation obligations effortlessly.
  • Financial Strength. Demonstrate your financial position to banks and investors with ease.

What Type of Records do you Need to Keep

The specific records you need vary depending on your business size, structure, and industry. However, here's a general guideline:

  • Business Income & Expenses: Receipts, invoices, bank statements, and other documents reflecting your financial activity.
  • Tax & Super Documents: Records detailing tax calculations, estimations, and super contributions.
  • Business Assets: Records of purchase, sale, and other costs of assets like equipment, buildings, or land.
  • Banking Records: All bank statements related to your business activity.
  • Business Activity Statements (BAS): Records for GST, PAYG, fuel tax credits, and other taxes.
  • Tax Returns: Documents related to income, deductions, assets, and personal services income.
  • Payroll Records: Employee information, salaries, wages, and super contributions.
  • Contractor & Supplier Records: Agreements, invoices, and receipts for contractors and suppliers.

Don't be overwhelmed! This list is a starting point. The ATO provides a comprehensive index to explore specific record-keeping requirements for your business type Index on Record Keeping for Business.

Thriday makes capturing, storing and reconciling business receipts easier than ever before so you can minimise tax and maximise returns

How Long do you Need to Keep Records?

The ATO recommends keeping records for at least five years. However, for complete peace of mind, we recommend keeping them for seven years. 

Here's why, incorporating the details from the ATO website:

  • Records beyond five years. The ATO website highlights situations where you'll need to keep records for over five years. These include:some text
    • Records connected to an assessment that's amended (you need to keep them for the period of review for that assessment, which is generally two years for individuals and small businesses and four years for other taxpayers, from the day after the ATO gives you the notice of assessment).
    • Records of information used again in a future return (e.g., if you carry forward a business loss and deduct it in a future tax return, keep the records used to work out the loss).
    • Records of depreciating assets (throughout the asset's effective life and disposal).
    • Records of capital gains tax assets (for five years after you dispose of the asset).
    • Petroleum resource rent tax records (as per specific legislation).

Beyond the ATO

While the Australian Taxation Office (ATO) is the primary body concerned with business record-keeping, other governing bodies may have additional requirements depending on your business structure and industry. 

Here are a few examples:

It's important to note that this is not an exhaustive list. Depending on your specific business activities and industry, additional record-keeping requirements from other government agencies or professional associations may exist. Consulting with a qualified accountant or business advisor can help you determine the specific record-keeping obligations that apply to your business.

Getting Help

Managing records can be easier with the right tools and support. Here are a few options to consider:

An Australian fintech platform like Thriday uses AI to automate banking, accounting, and tax. Thriday can help you with real-time cash flow and tax forecasting, automatic expense reconciliation, and comprehensive reports. Such a big help for anyone looking to streamline their business operations. 

If you'd prefer a more personalised approach, a team of experienced professionals can help you develop a customised record-keeping system and ensure you're on top of compliance requirements. They can answer your questions, guide you through the process, and offer ongoing support. However, here's the trade-off – it does come with an associated cost. 

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DISCLAIMER: Team Thrive Pty Ltd ABN 15 637 676 496 (Thriday) is an authorised representative (No.1297601) of Regional Australia Bank ABN 21 087 650 360 AFSL 241167 (Regional Australia Bank). Regional Australia Bank is the issuer of the transaction account and debit card available through Thriday. Any information provided by Thriday is general in nature and does not take into account your personal situation. You should consider whether Thriday is appropriate for you. Team Thrive No 2 Pty Ltd ABN 26 677 263 606 (Thriday Accounting) is a Registered Tax Agent (No.26262416).

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