Keeping great records is important for every business. It’s tied to legal and tax obligations, but it also allows you to keep track of how your business is performing. In this article we’re going to explore the pros and cons of using an electronic record-keeping system, and what you should consider when choosing one.
What kinds of records do businesses need to keep?
When it comes to accounting for your business, there are several types of records you’ll need to keep. These are used for capturing information, generating reports, and meeting your tax and legal obligations. They also help you monitor profit and loss, minimise risk, and protect your rights.
- As we covered in our article “Record-Keeping Requirements for Business”, you should keep records that relate to any of the following:
- Starting your business
- Running your business
- Changing your business
- Selling/Closing a business
Keep records relating to income and expenses, as well as those showing how you came to a conclusion (i.e. using methods, calculations, estimates). Any records that relate to both personal business affairs should show the portion that relates to your business.
As a general rule, you’ll need to keep your records for 5 years.
Business QLD has a great guide on what type of records to keep.
Why keep records electronically?
Some of the benefits of keeping electronic records are obvious. Using an electronic record-keeping system allows you to easily run reports, quickly search and access information, and often access your records from remote locations. It also provides security in that you are not reliant on a physical copy and the risk that comes with loss or destruction.
The ATO recommends keeping your records using an electronic record-keeping system. Bear in mind the ATO may need to access your records in the future – this is another reason to ensure everything is filed and labelled systematically and is easily accessible.
- Some more reasons for using an electronic record-keeping system:
- The use of electronic storage systems requires less physical space
- Quickly generate invoices, receipts, copies from previous records and even share them more quickly than paper versions
- Automate calculations
- Provide easy and quick access to your accountant and financial teams
What are the disadvantages?
While the advantages of an electronic record-keeping system are many, there are a few drawbacks to consider if you’re looking to make the switch.
- Backups are still required. It’s advisable to keep a separate copy of your electronic records in a separate place to your originals, to avoid loss or damage.
- Security and privacy are a potential risk. When you store records electronically, there’s a risk that someone could inadvertently or deliberately access your sensitive information. Most systems, however, have high protections in place.
- Can be expensive to set up, or require a regular subscription. Unlike keeping physical records, you will probably need to pay for the setup and/or maintenance of electronic records. For example, if you use software like Xero to store records, payment is required.
- Complex audit trails, if you need to correct a mistake. Sometimes you make an error and need to make a change. Electronic systems will keep track of the changes and more explanation may be required.
- Possibly a learning curve. Depending on which electronic system you choose, you may need to learn a new way of doing things.
How to keep electronic business records
It’s a good idea to first chat with your accountant, before making a decision about the software or platform to use.
At QCA, we use Xero but we have experience with other systems. Give us a call to discuss your options.
How can QCA help?
Have a chat with us about the software and platforms we recommend. We’ve seen a few so we can listen to your requirements and suggest some options.
If you’re unsure about whether a specific record must be kept, ask your accountant or financial advisor. It always pays to be safe. Speak to us if there is something you’re not sure about.
If you have any questions at all, do not hesitate to contact our team of professionals on 07 5593 6060 – we are here to help you.
A new business idea has sparked in your head, and you are ready to move forward? Or perhaps you have been running your business for a while and thinking of progressing to a different stage?
Having a clear direction supported by exact steps is crucial for any business. And that is the exact job of your business plan. Writing a business plan does not have to feel like that task you always try to avoid. Think about it as a support document that keeps you on track, keeps you in line with your vision – especially if you are a small business owner and you tend to wear multiple hats. To sidetrack is a natural thing to do, and the business plan is the element that helps you stay in your field.
What exactly is the one-page business plan?
A business plan is a document which outlines your business future. Your goals, your mission and vision, complete with exact tasks and how to achieve them. A one-page business plan is a simplified version of a traditional business plan. It is your strategy for the future. The one thing you need to include in your one-page business plan is to answer this simple question:
“What are you trying to achieve?”
Is the one-page business plan a good idea?
Yes. Whether you decide to stick to one page or develop it further later down the track, it will provide a solid base for your extended standard business plan.
Your business plan is a living document, as your business grows, you can always align your content according to your situation. The one-page business plan provides you and your potential stakeholders with the highlights of your business, it is easy to read, and it is an excellent tool to showcase your idea and remind yourself what to focus on.
What features should a one-page business plan include?
Keep in mind, a clear and precise outline and direction of your business is the key: no lengthy explanation, no unnecessary details. Get to the point and remember, it is called a one-page business plan for a reason.
The structure of your plan should include:
- Company Name
- Business overview
- Your mission and vision statement
- Your goals for the future and what you are trying to achieve
- Your marketing efforts
- An action plan with due dates.
ATO and the Australian business government site provides lots of resources on how to create a business plan or even use one of their templates as a starting point and reduce it to one page only.
How can QC Accountants Help?
Here at QC Accountants, we understand every business is different. We’re here to help you as we know that sometimes you just need someone who understands your situation. We can get you started with your one-page business plan.
We are available on email ([email protected]) or telephone (07 5593 6060).
Single Touch Payroll – For Employers & Employees
On 1 July 2018 the Australian Taxation Office (ATO) began the rollout of their new ‘more efficient’ system for employers to report their employee’s wages, tax & super (Employee Obligations) information to the ATO.
This system has been labelled as ‘single touch payroll’ as it requires employers to electronically notify the ATO of their Employee Obligations when they process each pay run.
The aim of Single Touch Payroll is to provide the ATO and employees with greater ongoing visibility into each employer’s obligations. It will also provide the ATO with the ability to more efficiently react to the late or incorrectly lodged Business Activity Statements or Superannuation reports.
For most employers with less than 20 employees, it is compulsory to begin using the Single Touch Payroll system from 1 July 2019, with larger employers adopting it from 1 July 2018.
Here is how it may affect you
The good news is that for most of employers once Single Touch Payroll is enabled in your accounting system, it will make minimal to no difference as Xero, Quickbooks, MYOB & Reckon will automatically prepare and lodge the Single Touch Payroll reports to the ATO when you finalise each payrun.
Here is where you may be affected:
- If you process payroll manually (not using software) – we encourage you to contact us to find a low-cost Single Touch Payroll software that suits your needs.
- If you lodge your superannuation or Business Activity Statements manually (without the assistance of QC Accountants) – we encourage you to regularly review & compare the amounts reported to ensure they are accurate. Single Touch Payroll makes it easy for the ATO to data match your lodgements.
- If you are late with your lodgements – Single Touch Payroll means that the ATO does not have to wait for employers to lodge their BAS or Superannuation to identify the Employee Obligations. The ATO can move more quickly to penalise and charge interest on unpaid amounts.
- If you are a ‘micro employer’ with less than 5 employees, you may only be required to report Single Touch Payroll quarterly.
QC Accountants will be contacting our clients who we know to have employee obligations closer to 1 July 2019 to assist them with transitioning into Single Touch Payroll.
The introduction of Single Touch Payroll is a big win for employees. It will provide employees with up to date income information on their MyGov accounts.
It also means that employees no longer need to wait for their employer’s to issue group certificates (payment summaries) at the end of each financial year.
More up to date superannuation lodgement & payment information will be available on MyGov allowing you more visibility to see what has been lodged & when it was paid.
If you have any questions on how Single Touch Payroll may affect your business or you personally please do not hesitate to contact our team at (07) 5593 6060 or at [email protected].
Daily Tax Tips – Are you prepared for 2020??
Day 1 – Car expenses you can claim as an employee!
As an employee, you can claim tax deductions for your motor vehicle if you use it for work purposes. These include transporting tools and equipment, travelling between workplaces & travelling away for work (“business kms”).
You can choose from two methods to receive the highest tax deduction – being a set rate method that may allow you to claim up to 5,000 business kms or $3,300, or a logbook method which requires you to keep a logbook for a 3-month period – but may result in tax deductions.
If you use your vehicle regularly for work purposes, we recommend that you keep a log book. If you only use your vehicle occasionally for work purposes – then the set rate per km method may be more suitable.
At QC Accountants we are always here to help & we will assist you to use the most appropriate method to ensure you receive the highest possible refund. Contact us today at [email protected].