Getting your small business records organised

Start by separating business from personal

If you can, use a dedicated bank account and card for the business. When business and personal spending share an account, every later task takes longer: bookkeeping, reporting and tax all begin with working out which is which.

If a separate account is not possible yet, aim for a clear habit: pay business costs from one place, and note anything paid personally so it does not get lost.

Decide where each kind of record lives

Choose one home for each type of record and stick to it. The exact system matters less than using it every time.

• Sales invoices and records of money received
• Supplier bills and receipts
• Bank and card statements
• Payroll and super records, if you have staff
• Contracts, insurance and licences
• Correspondence with government agencies

Capture records as they arrive

The easiest receipt to file is the one you deal with the day you get it. Many owners photograph paper receipts and keep them with the matching transaction, or forward emailed invoices to a single folder.

Digital copies are easier to search than paper, but only if they are named or stored in a consistent way. A short habit, such as adding the supplier and what it was for when you save a file, can make records far easier to find months later.

Handle the common problem areas

Some kinds of spending are easy to lose track of. A little attention to these tends to save the most time later.

• Cash purchases: keep the receipt, or write down what it was for the same day
• Personal card payments for business costs: note them as they happen
• Online subscriptions: keep the emailed invoice rather than relying on memory
• Cash taken from the business: record what it was for

A simple filing structure

A structure does not need to be clever. One option is a folder for each month, with the same few sub-folders inside each: sales, bills, bank statements and everything else. Another is to keep one folder per type of record and sort by date. What matters is that someone else, such as a bookkeeper, could find a document without asking you where it is.

Set a small, regular routine

Twenty minutes each week usually beats a long session once a year. A routine might look like this:

• Capture any receipts and invoices from the week
• Check the bank account for anything unrecognised
• Note invoices still waiting to be paid or sent
• Write down questions to ask later

Know what to keep, and for how long

How long a record must be kept depends on the type of record and your circumstances, so avoid relying on a rule of thumb. Check current guidance at ato.gov.au, or ask a registered professional.

When to ask for help

If records have fallen behind, or you are not sure what is needed, a conversation with a bookkeeper can help you set up a system that suits the business. The aim is to make the next step easier, not to catch up on everything at once.