Posted June 11, 2018
Is that shoebox marked ‘receipts’ under your front desk beginning to overflow? Don’t get caught out in the same trap each and every year, get your receipts and finances ready for the end of the financial year early this year with some great advice from HABA!
Keeping and managing your receipts can be tedious, we know – but as someone who’s self-employed, keeping good records is a great habit to get into as early as you can, and will save you heartache and hours of tedium later down the line. So what should you keep, what should you throw and how do you keep it?
Receipts to keep as a small business owner
Generally speaking, you will need to keep all receipts for any and all business expenses. This includes cash purchases, receipts from cheque books and credit card vouchers.
Your receipts should show:
- name of payee or payer
- the amount paid
- proof of payment
- the date of payment made
If they don’t, you can run into trouble with the ATO down the line.
Receipts Salon Owners should keep:
- Inventory Receipts- stock from suppliers, product and raw materials
- Assets Receipts- such as equipment purchased or rented, property, motor vehicles, furniture and any tools you need to do the job. Remember there are changes to these under the Federal Budget 2018!
- General Business Receipts – software, stationary, incidental expenses
- Training Receipts – receipts from educational courses including any courses taken at expos or through suppliers and any costs incurred in the taking of these courses (like travel and meals)
- Professional Receipts – your HABA membership can be claimed, as well as trade expos and salon certification
- Travel Receipts – all expenses from any travel, including food, accommodation and transit costs associated with running your business
Remember: If you buy something for your business, but sometimes use it for private use, you’ll also need to keep records showing what percentage of that was private. This is particularly relevant for things like cars and computers.
Do I need to keep paper receipts?
The truth is NO, you don’t need to keep physical or paper copies of your receipts. However, if you’re claiming something as a tax deduction, you have a legal obligation to retain that business record – either physically or digitally – for five years.
It is your responsibility to ensure that you can get access your records, so that the Australian Taxation Office (ATO) can review them at any time. If you fail to do so, you may find yourself in hot water with the tax office – and that’s something everyone wants to avoid!
At HABA, we appreciate that this is a long list of things to remember to do at the end of the year. However, it really is just part and parcel of owning and running your own business, no matter how tough it may seem. Make this time of the year easier on yourself, and get a great accountant in place to help guide you through the process. You can also have the peace of mind at this time of the year by joining HABA Payroll. HABA Payroll will handle some of the more mundane tasks, like organising payment summaries, and ensure that this is done in compliance with all changes to legislation accounted for – just one less thing for business owners to worry about. You can sign up to HABA Payroll here, and get yourself ready in time for EOFY.
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