Keeping Good Records is Critical

Income Records to Keep
Here is a broad outline of the type of records that the IRS requires you to keep. You must keep enough records to be able to calculate your income and expenses and to confirm your accounts.
Your records must be in English, unless you get approval from us to use another language. If you're registered for Sales Tax your records must be clear enough to work out your Sales Tax liability.

For business income records, you must keep:

  • books of account, such as your cashbook, journals and ledgers
  • receipts and invoices issued
  • bank statements and deposit slips
  • worksheets showing tax return calculations
  • any other necessary documents to confirm account entries.

Expense Records to Keep
It's a good idea to keep all personal records and transactions separate from business records. This is best achieved by using separate check and savings accounts for the business.

As with business records, you must keep all private records (including private bank account records)

For business expenses, keep records such as:

  • your cashbook and petty cash book
  • receipts and invoices received
  • bank statements and check butts
  • depreciation calculations
  • details of travel expenses
  • entertainment expenses
  • motor vehicle logbooks, telephone and power bills and other such records
  • wage records for employees
  • legal statements, such as purchase or sale agreements of a business and leases
  • interest and dividend statements.

Assets & Liabilities Records to Keep
You must also keep records for all your business assets and liabilities at the end of the year, including:

  • lists of debtors and creditors
  • stocktake figures
  • a fixed asset register
  • final profit and loss statements and balance sheets.

Records by Various Organisations
Here are some further records different types of organisations must keep.

  • Partnerships - a partnership agreement (if you have one)
  • Companies, Corporations etc - the certificate of incorporation, minute books
  • Trusts - the trust deed
  • Incorporated - the certificate of incorporation

It's important to keep all this information, as we routinely audit business records. If you haven't been keeping sufficient records you can be prosecuted and fined.