Income and Expenses Tracking
It is a legal requirement that you keep a record of your business income and expenses.
It doesn’t need to be complex, often a simple spreadsheet will suffice – remember to keep your receipts.
If you are just starting out and have very few business transactions, our income and expenses tracking spreadsheet is all you need.
Easily record as money comes into and out of your business.
Guidelines for Incomes and Expenses Record Keeping
The ATO has a few key guidelines for keeping records.
1. Keep Everything.
Keep all records. You need to keep all records related to starting, running, changing, selling or closing your business that are relevant to your tax and super affairs.If your expenses relate to business use and personal use, make sure you have clear documents to show the business portion.
2. Do Not Change Your Records
Don’t change your records. You need to make sure the information in your records is not changed (for example, by using electronic sales suppression tools) and you need to store records in a way that protects the information from being changed or the record from being damaged.
The ATO may ask you to demonstrate you have appropriate safeguards in place, for example, security measures and data back-ups.
You need to be able to reconstruct your original data if your record-keeping system changes over time.
3. Keep your Records for 5 Years.
Generally, the 5 years starts from when you prepared or obtained the record, or when you completed the transactions, whichever is later. However, it’s different in some situations. For example, for:
- fringe benefits tax (FBT) records the 5 years starts from the date you lodge your FBT return
- records for super contributions for employees, the 5 years starts from the date of the contribution
- for super fund choice for your employees, the 5 years starts from the date of employee engagement or when an employee is offered, chooses or changes their choice of fund.
- There are also other situations where you need to keep records for longer than 5 years, including:
- records connected to a tax return or document that’s corrected or amended
- records of information used again in a future return
- records of depreciating assets
- records of capital gains tax assets
- petroleum resource rent tax records.
You also need to keep all information about any routine procedures you have for destroying digital records.
4. Be able to provide them, if asked.
Make sure:
- you keep information about your record-keeping system so they can check that it meets the record-keeping requirements
- you must provide the ATO with encryption keys and information about how to access the data if you store your data and records digitally using an encryption system
- the ATO can extract and convert your data into a standard data format (for example, Excel or CSV)
- you provide the ATO with information about how to access them if you use passwords to protect your records
- your data records are identifiable, labelled or indexed as you store them. The ATO may need to extract them and use an indexing or text search system to look at them.
5. Keep them in English
Your records must be in English or can easily be converted to English.