By Hugo Schouten Accountant, Adelaide, Australia.
Substantiation rules will then apply to employee income and record-keeping will apply to income from self-employed work.
If you are a Professional or a Business person, the Tax Department expects a professional standard of bookkeeping and record keeping.
I suggest that you obtain the booklet 'A Guide to Keeping your Business records' which is free from the Tax Office (ref no NAT2068). See below for a Tax Office link.
You will need to carefully and honestly maintain:
Business bank account, cheque book, bank
statement, monthly bank reconciliation (never mix business and private income and
expenses).
Receipt book and/or invoices for sales,
credit card sales, stock used privately, returned goods credit notes, monthly debtors
list.
Petty cash slips, account statements,
invoices or receipt from supliers.
Invoices or receipts for expenses, cheque butts, credit card statements, log books, diaries of expenses.
If you are serious about your business,
you will write up a monthly cash receipts and expenses journal. Alternatively use a
computer package such as Quicken for Windows or Quick Books. These are cheap and extremely
effective.
NOTE: You must see your Accountant or Tax Advisor for further advice on any tax matters.
You can email me if you want to ask any Tax question for answering by email.
You can engage my professional services at commercial rates.
by Bonnie Rice
So your home business is rolling right along and everyone thinks
you're doing a great job. Only YOU know that it took most of the afternoon to find that
form to register your business. It was under a pile of papers in your paper- covered home
office. Well, it's time to do something about that.
Grab a box--the ones computer paper comes in are perfect. Put
all of your business papers in the box. Look! I knew there was a desk under there! Go
through the box and remove any personal papers that got mixed in, also weed out any you
won't use--at least get rid of junk mail and notices of events that have passed. It may
take a while to know what else you can weed out. Also sort out the papers you need to act
on--notices about meetings, appointments, and special events. Place those together in one
file folder and go through that regularly to be sure you don't miss anything.
Look at what you have. If it's a small handful of paper, you may
just need a couple file folders. If the box is almost full, you'll probably need a file
box or drawer, some hanging files and several file folders. If you have to go out and get
those, do it now, or right after you sort your papers. I'll wait.
OK, now we can start sorting the papers. You might prefer to
take the whole thing out in front of the TV during a favorite show. Start with the first
paper on the pile. Notice we didn't start by labeling folders. You may have labels no one
else has and some common ones may not apply. Think of a category for that paper and start
your first pile. You might want to write the title on a slip of paper to place near the
pile so you remember what goes where. Now take the second page and decide on a label for
that. You should have a fairly even distribution of papers into several piles.
If some seem too large, consider whether the category is too
vague. Some files will just be large, so don't assume you've done something wrong if the
file can't be easily broken down, but do try.
Now, place each pile into one of those hanging files if you have
them, or into a file folder if your filing system is small enough. Label the folders
appropriately. We do this after the sorting because the title may change to fit the
contents accurately. Take a break.
Back already? You know you could schedule to do this one file a
night, when you're relaxing or watching tv. If you do a bit at a time, it will probably be
done before you'd have time for the whole project. You can start with any of those
files-it would probably be a good idea to start with the larger ones so they will be
easier to work with sooner.
If you're doing the small file skip this paragraph. Take the
papers from the file folder and sort them into categories. Place each category into its
own file folder. For example, in my LEGAL hanging file, I have a file for bank papers, a
file for my assumed name papers, and a file for blank forms. You may have one for
insurance or licensing if your state requires that.
OK everyone, go through each file folder and put the pages in a
working order. (If you have client records, they might be alphabetized or arranged by zip
code or by the date of the last order, whatever is useful to you.)
Be sure to keep similar things together and to use categories
that are useful to you. Using the alphabet or unimportant dates should be a last resort,
not a rule. Now, whenever a paper comes into your office, place it in the proper file, or
start an "in" basket that you empty into your files at least once a week. Do not
let it pile up, it's not a fun way to spend a week-end. Just do a few at a time and it
will stay organized.
Now the next time a client calls about a job you'll have all of
the information at your fingertips and you'll feel so prepared.
Bonnie Rice, Publisher GET-O-LIFE newsletter
Go to Answers to Tax Questions from Internetters.
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