The ATO has highlighted the advantages of keeping your records digitally. If, for example, you use a commercially-available software package, it may help you:
- keep track of business income, expenses and assets as well as calculate depreciation;
- streamline your accounting practices and save time so you can focus on your business;
- automatically calculate wages, tax, superannuation and other amounts for activity statement and other purposes;
- meet your Single Touch Payroll (STP) reporting obligations;
- back up records using cloud storage to keep your records safe from flood, fire or theft.
Digital storage of paper records
You can store and keep paper records (or hard copies) digitally. The ATO accepts images of business paper records saved on a digital storage medium, provided the digital copies are true and clear reproductions of the original paper records and meet its five rules for record-keeping.
Once you have saved an image of your original paper records, you don’t have to keep the paper records unless a particular law or regulation requires you to.
However, if you enter information (for example, supplier information, date, amount and GST) from digital or paper records into your accounting software, you still need to keep a copy of the actual record, either digitally or on paper. Some accounting software packages may do both your accounting as well as your record keeping.
We can help help you choose suitable record-keeping software or you can head to the ATO website for suggestions.
Providing the ATO with copies of records
If the ATO asks to see copies of records you keep digitally, you can provide either digital or printed copies. The ATO may also request documentation from your computer about your record-keeping system (for example, information about your regular back-up and record destruction procedures) or ask you to provide paper copies.
If you use cloud storage, either through your accounting software or through a separate service provider, for example, Google Drive, Microsoft OneDrive or Dropbox, you should ensure:
- the record storage meets the record-keeping requirements;
- you download a complete copy of any records stored in the cloud before you change software provider and lose access to them.
Regardless of your eInvoicing software or system, you are responsible for determining the best option for storing business transaction data. You should:
- ensure that your process meets the record-keeping requirements
- discuss your options with your software provider
We can support you with decisions for storing your businesses data on Xero, Quick Books or MYOB.