{"id":309028,"date":"2026-09-28T10:30:28","date_gmt":"2026-09-27T22:30:28","guid":{"rendered":"https:\/\/www.reckon.com\/au\/?p=309028"},"modified":"2026-09-15T12:59:38","modified_gmt":"2026-09-15T00:59:38","slug":"small-business-record-keeping-rules","status":"publish","type":"post","link":"https:\/\/www.reckon.com\/au\/blog\/small-business-record-keeping-rules\/","title":{"rendered":"What records does the ATO actually expect you to keep"},"content":{"rendered":"

[et_pb_section fb_built=”1″ _builder_version=”4.16″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.23″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_padding=”||0px||false|false” locked=”off” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f3f2f6″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Intro” _builder_version=”4.27.8″ header_2_font_size=”32px” custom_margin=”||0px|||” custom_padding=”||28px|||” hover_enabled=”0″ header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n

Record-keeping for your business, beyond good practice, boils down to the ATO\u2019s 5-year rule. The rule requires businesses to keep records covering tax, super, and registration related to starting, running, selling, and closing your business. With that litmus test, it sounds like a business would need to keep a record of pretty much everything. But what makes a document a proper record? Not all transactions are the same, and invoices and contracts differ entirely.<\/p>\n

Let\u2019s take out the guesswork by learning what a record truly is, and what the ATO expects you to keep.<\/p>\n

What a record looks like<\/h2>\n

According to the ATO, valid records must pass a 6-point test that essentially answers when, what, how much, why, and who \u2014 plus GST, if relevant. This information looks like:<\/p>\n

    \n
  1. When:<\/strong> Date<\/li>\n
  2. What:<\/strong> Description of the transaction (i.e. sale, lease, employment contract)<\/li>\n
  3. How much:<\/strong> Amount (sale\/wage\/purchases)<\/li>\n
  4. Why:<\/strong> Purpose of the transaction<\/li>\n
  5. Who:<\/strong> Relationship between parties, where relevant (i.e. supplier vs employee vs connection vs family)<\/li>\n
  6. GST<\/strong> <\/a>(if applicable)<\/li>\n<\/ol>\n

    Additional requirements to the rule of record keeping<\/h3>\n

    The valid record must remain unaltered and protected from damage. A faded receipt in your wallet could be considered damaged, so it’s worth photographing or scanning physical documents and saving digital copies.<\/p>\n

    It\u2019s also vital to keep clear documentation if an expense<\/a> has both business and personal use. Some businesses have a clear separation between business and individual, but for sole traders, the line can be blurry, which is why accurate records make the separation clear. The ATO expects you to show the business portion.<\/p>\n

    It\u2019s also important to have your records readily available, because good record-keeping means producing the document when the ATO asks.<\/p>\n

    So what does good record-keeping look like for a small business?<\/p>\n

    Example: Marty\u2019s Receipt<\/h2>\n

    Marty owns a cafe and has been in business for several years. He has a working record of when he started and a habit of copying digital documents and taking photos of receipts.<\/p>\n

    [\/et_pb_text][et_pb_code disabled_on=”on|on|off” admin_label=”Code: desktop” _builder_version=”4.27.8″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

    <\/p>\n
    <\/p>\n

    Does this receipt pass the ATO’s test?<\/h3>\n

    Marty’s Cafe. Click each part of the invoice to check it against the ATO’s six points.<\/pee> <\/div>\n

    <\/p>\n

    <\/p>\n
    \n
    <\/div>\n<\/div>\n

    0<\/span> of 6 found<\/span> <\/div>\n

    <\/p>\n

    <\/p>\n
    <\/p>\n
    From<\/span>Bean & Barista Equipment Co<\/span><\/div>\n

    <\/p>\n

    Bill to<\/span>Marty’s Cafe<\/span><\/div>\n

    <\/div>\n

    <\/p>\n

    5<\/span><\/span><\/span> <\/div>\n

    <\/p>\n

    <\/p>\n
    Relationship between parties<\/div>\n

    <\/p>\n

    Who supplied it, who bought it<\/div>\n

    <\/div>\n

    <\/p>\n

    <\/div>\n

    <\/p>\n

    Invoice date<\/span>3 March 2026<\/span> <\/div>\n

    <\/p>\n

    1<\/span><\/span><\/span> <\/div>\n

    <\/p>\n

    <\/p>\n
    Date<\/div>\n

    <\/p>\n

    When it happened<\/div>\n

    <\/div>\n

    <\/p>\n

    <\/div>\n

    <\/p>\n

    Espresso machine, commercial grade, 2 group head<\/span> <\/div>\n

    <\/p>\n

    2<\/span><\/span><\/span> <\/div>\n

    <\/p>\n

    <\/p>\n
    Description<\/div>\n

    <\/p>\n

    What was bought<\/div>\n

    <\/div>\n

    <\/p>\n

    For cafe operations, replacing existing equipment<\/span> <\/div>\n

    <\/p>\n

    4<\/span><\/span><\/span> <\/div>\n

    <\/p>\n

    <\/p>\n
    Purpose<\/div>\n

    <\/p>\n

    Why it was bought<\/div>\n

    <\/div>\n

    <\/p>\n

    <\/div>\n

    <\/p>\n

    Subtotal (excl. GST)<\/span>$5,454.55<\/span> <\/div>\n

    <\/p>\n

    GST<\/span>$545.45<\/span> <\/div>\n

    <\/p>\n

    6<\/span><\/span><\/span> <\/div>\n

    <\/p>\n

    <\/p>\n
    GST information<\/div>\n

    <\/p>\n

    Called out separately<\/div>\n

    <\/div>\n

    <\/p>\n

    Total<\/span>$6,000.00<\/span> <\/div>\n

    <\/p>\n

    3<\/span><\/span><\/span> <\/div>\n

    <\/p>\n

    <\/p>\n
    Amount<\/div>\n

    <\/p>\n

    How much changed hands<\/div>\n

    <\/div>\n

    <\/div>\n

    <\/p>\n

    <\/p>\n
    Marty’s receipt passes the test<\/div>\n

    <\/p>\n

    All six points are on the one document. Nothing extra was needed, he just kept what the supplier gave him.<\/div>\n

    <\/div>\n

    <\/p>\n

    Reset<\/div>\n

    <\/div>\n

    <\/p>\n