What records do I need to keep?
Record keeping is a legal requirement. For tax purposes you must keep records for at least five years. As a sole trader, you can decide whether to keep electronic or paper copies of your records, but it is recommended you store these in a safe and secure location and have a back-up of your records. Records have to be in English, or in a form that can easily be converted.
As a company director, you are required to ensure that the company keeps certain financial records to comply with the requirements of the Corporations Act 2001. Financial records for companies must be kept for a minimum of 7 years.
The Act states the company must keep written financial records that:
- record and explain its transactions and financial position and performance
- enable true and fair financial statements to be prepared and audited.