Small business-what books and records should my company keep

By law a company must keep financial records that:
  • correctly record and explain its transactions and financial position and performance, and

  • enable true and fair financial statements to be prepared and audited.

‘Financial records’ include invoices, receipts, cheques, working papers and other documents needed to explain the methods by which your financial reports are prepared. Financial records must be kept for seven years.

Financial records include:

  • financial statements (not required for small proprietary companies but recommended) – for example, profit and loss accounts, balance sheets, depreciation schedules and taxation returns

  • general ledger and general journal

  • asset register

  • computer back-up discs – suggested frequency is at least monthly

  • cash records – for example, cash receipts journal, bank deposit books, cash payments journal, cheque butts and petty cash books

  • bank account statements, bank reconciliations and bank loan documents

  • sales/debtor records – for example, sales journal, debtors ledger, list of debtors, invoices and statements issued, and delivery dockets

  • work-in-progress records

  • job/customer files

  • stock listings

  • creditors records – for example, invoices and statements received and paid, creditors ledger and unpaid invoices

  • all correspondence, annual returns and ASIC forms

  • wages and superannuation records

  • registers of members (where applicable), options, debenture holders, prescribed interests, charges and unclaimed property

  • minutes of meetings of directors and/or members, and

  • deeds (where applicable) – for example, for trusts, debentures, contracts and agreements, such as hire purchase and leases, and inter-company transactions, including guarantees.

Financial records may be kept electronically, but must be convertible into hard copy. Even when records are kept on a third party’s computer, such as your accountant’s computer, you must provide a hard copy to a person entitled to inspect the records.

Seek professional advice if you have any doubt about which financial records should be prepared and kept.

More information on this topic

Knowing your legal requirements - companies

Knowing your legal requirements - business names

Directors and financial reporting

Companies that must lodge financial reports with ASIC

Keeping your company details up to date

Changing a company type

Changing a company name

Ensuring your company is solvent

Annual statements and late fees

How to lodge documents and avoid late fees

Waiving a late lodgement fee

Illegal phoenix activity

Your obligation as a company director

Information on the ASIC website

Directors and financial reporting - INFO 183

What books and records should my company keep? - INFO 76

Your company and the law - INFO 79

More about small business

Small business home

Starting a small business

Compliance for small business

Closing a small business

Resources

Last updated: 04/11/2013 12:00