According to the ATO, of all the things that can cause small businesses to fold, “high on that list is poor record keeping”.
More than half of the businesses they visited in their Protecting honest businesses they visited in their record keeping.
Issues they found include businesses:
- Estimating their sales and income;
- Using the ‘no sale’ and ‘void’ button on cash registers when taking cash payments;
- Not keeping cash register tapes and not reconciling at the end of the day; and
- Paying their employees cash-in-hand.
They are writing to these businesses to recommend they attend one of the ATO’s record keeping workshops, which cover why good record keeping is important and how it will save them time.
The ATO also suggests that tax practitioners let clients know about these workshops if it will help them improve their record keeping.