What Are the Record Keeping Requirements Australia-wide? (And How to Get It Right)

Keeping accurate records is not just good practice; it is a legal requirement in Australia. Whether you operate as a sole trader or run a more substantial business with employees, maintaining proper records ensures compliance with the Australian Taxation Office (ATO) and Fair Work Australia. This proactive approach helps you avoid penalties and supports smart business decision-making.

At Love Bookkeeping, we help handle your record keeping process so you can concentrate on what matters most—running your business—without the stress of paperwork.

Record Keeping Requirements Australia: Why They Matter

Under Australian tax law, all businesses must meet specific record keeping requirements to remain compliant with the Australian Taxation Office (ATO) and Fair Work obligations.

These record keeping rules are not optional — they are legal requirements designed to:

• Explain all income and deductions

• Support GST and PAYG reporting

• Maintain clear, traceable business activity

  
  

Whether it’s a $6,000 client invoice or a $3 receipt for office supplies, you must have documentation to back it up.

The ATO may check for inconsistencies in:

• Invoice numbering and transaction references

• Margins between income and expenses

• Cheque numbers

• Claims made for travel, vehicle, or home office use

  
  

💬 Tip: Don’t assume your records won’t be reviewed. Even small gaps or mismatches can trigger an ATO review or audit.

Claiming GST? Here's What You Need

If you want to claim GST credits, it’s essential to have a valid tax invoice for any business purchase over $82.50 (including GST). For purchases under this amount, the following records are acceptable:

• EFTPOS dockets

• Supplier receipts

  
  

Retaining these documents helps you maximise your claim and stay compliant.

Paper or Digital Records?

You have flexibility in how you keep records, whether digitally or on paper, as long as you meet ATO requirements:

• Records must be in English, complete, legible, and clearly describe transactions

• They should be accessible, printable, and secure

• Records must not be altered or manipulated after creation

  
  

At Love Bookkeeping, we recommend digital record keeping using secure, cloud-based tools such as Xero, Hubdoc, and Microsoft OneDrive. These platforms help us stay organised, compliant, and proactive by automating checks, managing tasks, and ensuring accurate financial records at all times.

How Long Must Records Be Kept?

It's important to know how long you should keep different types of records:

• Business Records: Maintain them for five years after submitting your tax return.

• Payroll & Employee Records: Keep these for seven years after the end of the financial year.

  
  

Keeping your records for the required duration not only ensures compliance and it is essential to be able produce these documents in case of an audit by the ATO or Fairwork.

The Consequences of Poor Record Keeping

Failing to keep accurate records can lead to several serious issues for your business. Some consequences include:

• Financial Penalties: The ATO may impose fines for incomplete or inaccurate records, potentially running into thousands of dollars.

• Legal Challenges: Poor documentation can result in compliance issues with Fair Work Australia, leading to potential legal disputes that can cost you time and money.

• Informed Decision-Making: Inadequate records hinder your ability to make data-driven choices, which can adversely affect your business strategy.

  
  

Best Practices for Effective Record Keeping

• Organise Regularly: Develop a daily system to keep your records in order. For example, set aside 15 minutes each day to file new documents.

• Use Reliable Software: Accounting software like Xero makes tracking income and expenses easier.

• Set Reminders: Use digital calendars to remind you when it’s time to review and update your records.

• Backup Records: Always have backups, whether your files are paper or digital, to prevent loss.

• Seek Professional Help: If managing records feels stressful, consider hiring a professional service like Love Bookkeeping.

  
  

The Importance of Accurate Records

Accurate record keeping is crucial for compliance, financial accuracy, and effective decision-making. By understanding the requirements set forth by the ATO and Fair Work Australia, you protect yourself from unwanted issues.

With the right systems, tools, and habits in place, record keeping can seamlessly integrate into your business operations.

At Love Bookkeeping, we are dedicated to supporting you in managing your records efficiently, allowing you to focus on what you do best: growing your business.

By prioritising accurate record keeping, you are meeting legal obligations and laying the groundwork for your business’s success.

Take Action Today

Make a commitment to your business’s future by ensuring your records are complete, accurate, and compliant. Contact Love Bookkeeping today to discover how we can help streamline your record-keeping process.

Need help managing your record keeping? Get in touch with Love Bookkeeping for a free consultation.