(Without Losing Your Mind)
So, you've started a small business in Australia. Congrats! You've got the passion, the ABN, and maybe even a coffee loyalty card from your local café with more stamps than customers. But now the ATO wants to talk... about record keeping.
Yes, it's that thrilling part of business ownership—keeping receipts, tracking expenses, and making sure your books are tighter than your jeans after tax season.
So, let's break down what you actually need to know to stay ATO-compliant without hiring an entire accounting department or living in fear of the Tax Man's audit hammer.
What Must I Legally Record and Keep Track Of?
According to the Australian Taxation Office (ATO), here's what you need to record:
1. Tax Invoices
If you've charged GST or been charged GST, you need to keep tax invoices. If it's over $82.50 (including GST), you must have a tax invoice.
Hot tip: If Steve hands you an invoice written in crayon on a napkin, ask for something more formal.
When your bookkeeper chases you for invoices, it’s because must means not optional - we’re not emailing for fun.
2. Payroll Records
Got employees? You need to track:
- Gross wages
- PAYG withheld
- Superannuation contributions
- Leave entitlements
If someone works for you, you can’t just pay them in pizza. The ATO wants records.
3. Superannuation Records
You must show payment dates, amounts, and correspondence proving you’ve paid the correct super contributions.
4. Business Activity Statements (BAS)
For BAS preparation and GST compliance, you’ll need:
- Sales and purchase records
- GST collected and paid
- Adjustments and corrections
Think of your BAS like a financial selfie—best not to fake it.
How Long Do I Need to Keep Records?
You need to keep records for five years after lodgement. Yes, even if you move to Tasmania and change your name. That means your business records in Australia must stay alive and well.
So yes, that receipt from 4.5 years ago for Tim Tams still matters.
Digital or Paper? (Spoiler: Paper is So Last Decade)
You don’t need to hoard receipts. Digital bookkeeping and cloud accounting tools are ATO-approved if they’re:
- Accurate
- Secure
- Easily accessible
Good software like Xero, MYOB, or QuickBooks will keep your books in order without eating up storage space.
How to Stay Audit-Proof (Or at Least Audit-Resistant)
You can’t be 100% audit-proof, but you can reduce your chances:
- ✅ Keep all required records
- ✅ Use reliable cloud accounting software
- ✅ Reconcile regularly
- ✅ Hire a bookkeeper if numbers make you queasy
- ✅ Keep personal and business expenses separate
The Ultimate Bookkeeping Checklist
- Store all tax invoices
- Record all income & expenses
- Track payroll and super
- File BAS accurately
- Save records for 5 years
- Use digital tools (ditch the shoebox)
- Reconcile regularly
- Avoid weird “creative” deductions
Keep Calm and Bookkeep On
ATO record keeping doesn’t have to be scary. With the right tools and habits, your small business records will work for you—not against you.
Next time someone says they “lost a receipt,” you can reply:
"No worries, I scan everything into my cloud accounting software, mate."
And just like that, you're the most compliant legend in the room.
