Keeping an accurate record of expensesOct 12, 2018
To claim a GST credit for purchases that cost $82.50 or more (including GST), you should have one of the following:
- a tax invoice
- a cash register docket
- a receipt
- an invoice.
If a business gets audited by the ATO, they will need to have this evidence in order to justify their GST and tax deduction claims.
Practically, keeping accurate records of expenses for a business is a necessity
There are many reasons why a business needs to keep accurate records. Not only so they know how much GST they can claim, but also to know how much of each type of expense they are incurring in running their business. Reviewing expenses should be done regularly by the business owner and financial controllers. Having access to copies of invoices, as well as a list of expenses in Xero, will provide the most in-depth information required to analyse the businesses outgoings during a period.
What is needed in keeping accurate records of expenses/receipts
Gone are the days where a bookkeeper or admin person will be thrown a whole pile of receipts and asked to process the expenses in your accounting software. If this is still being done in your business, please contact us immediately!
These days, it is so simple to log into your Xero file on your mobile device, snap a photo of the expense receipt and create an expense directly into your accounting package. This will record the value of your expense and keep a copy of receipt all in one convenient place. Bye-bye paper!
For supplier bills, these are processed slightly differently. Rather than uploading copies of these directly into your Xero file, photos of these, PDF copies or direct emails can be uploaded into specific bill processing software. Entryless, Receipt Bank or Shoeboxed which will automatically generate bills in your Xero file. No more Accounts Payable administration! More on this in posts to come.
Keeping accurate records of your expenses and receipts is now easier than ever before using Xero. No longer will you need to fumble around the office with paper receipts, have people manually upload expenses and data entry into your accounting software.
If you are still using paper and have someone doing the ‘data entry’ for your business, maybe there is a simpler, faster and cheaper way of doing your bookkeeping and record keeping using automation and better business procedures.
If you need assistance with keeping track of your receipts and expenses in your business, please feel free to contact us.
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