Auckland, New Zealand
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For any business-starter, this is the most important point. These records — receipts, proofs, documents, etc. — have to be carefully stored for up to seven years as per NZ law. Here is a summarised list of the types of record-keeping you should be aware of:
⇒ Income Records — These include credit card sales, vouchers and voucher schedules, debit notes, credit notes, and cash register tapes (from cash sales).
⇒ Tax Invoices — This is a document which includes the name and registration number of the supplier, name, and address of the recipient, date the tax invoice is being issued, a description of the good and services supplied, the quantity or volume of the goods and services supplied and the total amount of tax charged.
⇒ Financial Reports — Usually, small companies are not required to prepare financial accounts if they are not part of a group of companies, and haven't derived income in excess of $30,000, and haven't incurred expenditure in excess of $30,000. These reports are generally only applicable to companies with an annual revenue of $30 million or less, and assets of $60 million or less.
⇒ Wage Books — Your wage book should contain details such as total gross earnings, the amount before PAYE is deducted, the amount of PAYE deducted, any payroll giving donations and tax credits for them, any child support allowances, any student loan repayments, any KiwiSaver employee deductions, any KiwiSaver employer contributions, any net KiwiSaver employer contributions, any ESCT, and value of tax-free reimbursing allowances. A summary of the wag book will also be required to be made separately.
⇒ Audit Records — These include accounting records, general ledgers, journals, subsidiary account books, charts and codes of accounts, accounting instruction manuals, and system and program documentation that describe your accounting system. These records can either be kept in written format or electronically stored. Either way, it is best to keep both the old and new records.
⇒ Deposit Books — You can get these from the banks, they provide large deposit books with carbonized copies so you can keep a copy for yourself. They usually include the date of deposit, the payer's name (the person you got the funds from), the amount of each deposit, columns for whether the deposit is a cheque, credit card or cash.
⇒ Cashbooks — These are used to record all money that your business pays and receives, including cheque, direct credit, internet and telephone banking, and automatic teller machines. You also record all sales and purchases related to your business each month.
⇒ Banking Records — Cheque books - record the full details on the cheque-book as you write out each cheque.
⇒ Deposit Books — These include bank statements from your business and private accounts. You can make an arrangement with your bank to issue your statement. Ensure that you clearly identify money you withdraw from your business account for personal use as "personal drawings", and any money you introduce to the business from your own personal funds as "personal funds introduced".
⇒ Expense Records — These include invoices for purchases of more than $50, which you must receive when you buy goods or services on credit for the business, evidence of payment for purchases of $50 or less, evidence of credit card purchases, including credit card vouchers, payment receipts, and monthly statements. Also, keep the invoice issued at the time of purchase.
⇒ Petty Cash Books — This is generally maintained to reduce the burden of 'Main Cash Book', where only petty (small) expenses are recorded. No receipt (except the Chief Cashier), however small it may be, is recorded in it.
Nowadays, most information can be safely stored on a computer or an online cloud. If you already have cloud access or accounting software like Xero, where you store and calculate your accounts, well and good. If not, we can help guide you through it. Just sign up with us.
We know all that information seems a little too much, so many records to keep, the nitty-gritty of it all can be a little hectic. But, by law, every business is required to do so. Here is what you can do to simplify it:
We hope you find some gold-worthy tip there; if not, and you have doubts or questions, talk to us!
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Auckland, New Zealand
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