Records Management Tips to Relieve Tax Time Stress

Posted on February 12, 2018 by ATB Chartered Accountants

The end of the financial year is a busy enough time as it is. The last thing you want to be doing is searching for that invoice from December 21st that you didn’t realize you need until now.

We’ve compiled a few tips and recommendations for you to do throughout the year, and save yourself a headache when filling out your tax return. Adopting a couple of regular habits throughout the year can ease the stress of managing your business accounts exponentially.

Effective record keeping systems

Records Management Tips to Relieve Tax Time Stress

If you haven’t already, the best thing you can do for your business is to establish an effective record keeping system.

While we recommend using online software to do so, a manual system will also suffice.

Software in the cloud

Records Management Tips to Relieve Tax Time Stress

When you’re choosing between the hundreds of professional cloud-based accounting softwares available, you need to match its capabilities to the needs of your business. Things to consider include whether the software has stock management and tracking, maintains sales records, and produces invoices for you.

While stock management may be critical for a retail shop, it may not be for a software company. We feel that simplicity is key. And you should be looking for the most accessible software which still has the capacity to suit your needs.

What financial records do I keep?

Once you’ve chosen your software, you’ll need to have a clear understanding of what exactly it is that you’ll need to keep records of. For example, you will need to maintain records of the amount of super you’ve contributed to each employee’s nominated fund and how exactly this amount was calculated.

How long do I need to keep financial records for?

Records Management Tips to Relieve Tax Time Stress

These records must be maintained from the previous five years. And they must be written in English or in an easily translatable format. Taking care to ensure that you’ve also met any extra requirements according to any employee awards and regulations will save you from a nasty surprise come tax season.

What do I need to do if I use PAYG?

Records Management Tips to Relieve Tax Time Stress

In a similar manner, if you’re using the Pay As You Go withholding system, you will need to keep records throughout the year of the amounts withheld. And you do need to maintain records of employee tax file number declarations, withholding declarations, employee payment summaries and annual reports of your PAYG tax.

Unfortunately, if you are requested to provide evidence to the ATO and fail to maintain these records, you’re likely to spend much more time dealing with tax officers than you’d like. And more time spent on taxes results in less time you can spend growing your business and engaging with your customers.

What about Fringe Benefits tax records?

Records Management Tips to Relieve Tax Time Stress

Another key facet of your records maintenance should be your fringe benefits tax evidence. Not only will you need to keep track of the taxable value of every fringe benefit you’ve provided to an employee, you’ll need to show how it was determined.

The Fringe Benefits Tax is based on your own self-assessment. This can be quite challenging. Consulting ATB Chartered Accountants on any assessments you need to make will ensure that we calculate the most accurate amount of tax you should be paying.

Where do I start?

If your software requirements are quite simple, the ATO app may be sufficient to manage your business accounts.

Otherwise, contact ATB Chartered Accountants who can help you find the right software for your tax filing and records management needs.