Running a business: Keeping records
Keeping accurate, complete records
Your business records should cover:
- banking - cheque books, deposit books, bank statements
- your income - invoices, credit card sales, debit and credit notes
- your expenses - invoices for purchases, credit card purchases
- cashbooks, petty cashbooks and wagebooks.
Reasons for keeping your records accurate and up-to-date
There are many reasons why you should keep accurate records but the most important is that it will save you both time and money.
- Accurate records will help you to have better control of your business. They help deterine whether your business is making enough money to meet its expenses.
- You'll also have a better idea of how well your business is doing during the year, rather than finding out when your finally get your books done at the end.
- Good record keeping increases your chances of getting finance or funding and makes it easier for others to know whether to invest in your business.
- When it's time to fill in your income tax return and GST returns, all the information you need will be readily available. You'll find the more up-to-date your records are, the quicker you'll get through your tax returns and paperwork.
- An Inland Revenue audit will be quicker and less disruptive if all the information is easy to find. If you are in business you can expect to be audited at some stage.
Documents you need to file and keep
Basically you need to keep enough records to calculate your income and expenses and to confirm your accounts. Here is a broad outline of the records you will need to keep:
- books of account that record receipts and payments, such as your cashbook, journals and ledgers
- bank statements
- wage book, if you're an employer
- invoices, including tax invoices
- receipts
- cheque and deposit books
- details of entertainment expenses for clients, staff or suppliers
- till tapes and day books
- stocktake figures
- list of debtors and creditors
- interest and dividend statements
- list of assets and liabilities
- depreciation schedules
- final profit and loss statements and balance sheets
- any other documents that confirm entries in your accounts, such as worksheets.
Need more help?
If you need assistance with your record keeping, make an appointment for free advice from a Business Tax Information Officer or a Maori Community Officer from Inland Revenue.
Date published: 18 Jan 2005
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