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Now-a-days in Australia, some business owners still prefer manual record keeping systems, but most of the modern business persons prefer to use an electronic record keeping system. Now you can lodge your tax return online with the help of electronic records. Electronic records are the collection of documents by using electronic equipment. They include, but are not limited to, Word and Excel documents, electronic mail, computer-based diaries, appointment books and databases.
Most businesses use Accounting and ERP software programs to simplify the record keeping procedure. One can keep the records of their payment, invoice, and different transaction electronically or manually by using papers, but keeping electronic records will have some advantages such as:

  • Electronic record keeping make some tasks easier;
  • Keep up with the latest tax rates, tax laws and rulings; 
  • Easy to find out the required data;
  • Reduce errors and easy to erase; 
  • Requires less physical storage space.

Electronic records must remain available, accessible, retrievable and useable for as long as a business need exists. If you keep your business records electronically you must fulfil the following requirements:

  • Personal financial records must be kept for 5 years after they are prepared;
  • Other types or record, like - company financial record, records of fringe benefits and capital gains has to be kept for 7 years;
  • In English or in a form that can be easily converted by the users.

In addition, electronic records must be kept in a way that allows you to provide ATO with paper copies if they request them. If you intend to file your tax return online, it’s better to keep both paper copies and electronic records for future reference. It will make your tax lodgement easier.

It is a good idea to keep personal and business records separate, to simplify business reporting and tax returns. To make it secure you have to control the incoming and outgoing flow of your information. Besides that, it is a good practice to keep a back-up copy of computer files. If you intend to use a bookkeeper or accountant, get their advice about the best system for your organisation and make sure the system you choose is easily understood and operated easily.

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