Attach Files to Your Financial Data
By law, the Australian Taxation Office (“ATO”) requires you to keep business records for five years after they are prepared, obtained or the transactions completed, whichever occurs the latest.
In many instances you will need to keep business records longer, for example, if the information from those records is used in a later tax return, such as, losses carried forward or fixed asset details for capital gains tax purposes. Other regulatory bodies may have different record keeping requirements, particularly regarding how long they should be kept.
There are penalties for not maintaining the required records and keeping them for the requisite timeframe.
How much do you spend on document storage to meet tax office requirements?
- how much space it takes up in paid storage facilities to keep 5 to 7 years worth of documents to meet tax office requirements when you might be able to pay for a smaller storage space
- how much employee time is involved in sorting the documents for storage, transporting them to storage, and then removing them from storage once the time is up
- what if you need to refer to a document in storage? What is the cost of retrieval – consider staff time and travel costs
The ATO allows you to keep your records electronically. In NAT 3029-05.2011 the ATO clearly states that they accept the imaging of business paper records onto an electronic storage medium.
In a previous blog I talked about the benefits of using third party providers to electronically extract information from invoices and receipts and code them direct to your accounting software whilst maintaining an image of the invoice or receipt on file.
If you don’t want to go the whole hog and automate data extraction from your invoices, one accounting package, Xero, now enables you to attach invoices and other documents, (for example, loan documentation, fixed asset paperwork, contractual information), directly into the accounting software via drag and drop, or attach. You can even attach several documents to one transaction.
Why is this important – apart from the already alluded to storage facility cost savings?
Used effectively, with all supplier invoices, loan documentation etc. attached to the appropriate transaction, your accountant or bookkeeper can easily view the invoice and obtain the details they require. No more to-ing and fro-ing between you and your accountant, no more double or triple-handling (and consequent cost escalations) as your accountant or bookkeeper puts down the work they had started pending receipt of the paperwork from you.
Take a look at the video and see how easy it is to attach documents in Xero and reduce costs by saving on storage space, storage fees, employee, accounting and bookkeeping costs whilst at the same time making it oh-so-easy to retrieve a document to view its contents.