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Records management for small business

Stay legal by keeping the right financial and business records

On this page

  • Record keeping system
  • Financial records
  • Business records


You are required by the Australian Taxation Office (ATO) to keep business records for a minimum of five years, in plain English and in a way the tax office can access if they need it.

Set up a record keeping system

The ATO has a Record keeping evaluation tool that will help you find out what records you should keep and evaluate how well your business is keeping records.

A well organised filing cabinet is the best way to keep all your records filed. The recommended way to file is by date to help with your tax return as it's logical and easily understood, but you can choose whatever method works for you.

Write down the procedure you use for filing so if someone has to do it for you they know what to do. As your business grows, this is a job you could give someone else to do. Use our Financial policies and procedures manual template if you don't have one already.

Financial policy and procedure manual template (DOC 191.5 KB)DOC icon

Financial record keeping

For any transaction that has a financial element keep:

  • copies of invoices and receipts you provide for goods sold or services rendered
  • invoices for goods or services you purchase or bills you pay such as rent, rates, insurance, licence fees etc
  • payments to employees and to other organisations on behalf of employees e.g. super funds, PAYG tax
  • financial statements including profit and loss statement and balance sheet
  • tax return information
  • bank account and credit card statements
  • end of year stocktake records, assets register etc.

Good practice records management should include preparing and using both the profit and loss budget and cash flow forecast.

Business record keeping

In addition to your ATO financial records requirements other government departments require you to keep records relating to your business and employees.

When setting up your record keeping system, keep:

  • contracts, insurance agreements and other legal documents
  • your lease if you're renting
  • licences and permits
  • employee records including time sheets, copies of pay slips etc
  • safety records e.g. risk assessment for occupational health and safety
  • any other records which are 'business activity' specific and required by law for the operation of your business e.g. for a café your food safety plan.

Case Study: Avoid conflict in your family business

'It took Cory and Lyndon about two years of financial struggle and hard work before the business started to change – but it has been for the better, and the company has continued to thrive ever since.'

Gary Kennedy-Kennedy Trailers (photo courtesy of the Bairnsdale Advertiser)

Read more about avoiding conflict in your family business.

Gary Kennedy from Kennedy Trailers