Record keeping in the primary production industry

This fact sheet produced by the ATO sets out what records you need to keep for your daily business transactions if you are a primary producer.

 

What does a typical primary production record keeping system look like?

Income records

  • Use pre-numbered invoices. This helps keep track of all goods and services sold and monitor outstanding accounts.
  • Keep Recipient Created Tax Invoices (RCTIs) issued to you in a systematic manner ie by date order or in alphabetical order.
  • Regularly update and summarise income into a cash receipts book.
  • Maintain a filing system to keep track of paid and unpaid accounts.
  • Perform bank reconciliations between bank statements, invoices issued, RCTIs received and cash receipts book at least monthly.
  • Keep records of any elections or estimates made.
  • Expense records
  • Make payment of expenses by cheque or bank transfer. This helps keep track of allowable deductions.
  • Use separate bank accounts for business and personal use.
  • Use a petty cash system to keep track of minor cash expenses.
  • Record payments to contractors in a secondary record such as a cash payments book. You will need a valid tax invoice if the contractor is registered for goods and services tax (GST) and you wish to claim an input tax credit.
  • If a supplier (including a contractor) does not provide you with an Australian business number (ABN) you must withhold 46.5% from the payment. Otherwise you can ask for a Statement by a supplier (NAT 3346) and you should keep a copy for your records.
  • Maintain a filing system to keep track of paid and unpaid accounts.
  • Keep invoices and file in a systematic manner to keep track of paid and unpaid accounts.
  • Keep documentary evidence to substantiate business expenses. For example, you may need to show how you calculated the business use of your motor vehicle expenses by keeping a log book or other types of documentation depending upon what method you choose.
  • Update and summarise expenditure into cash payments book using cheque butts and invoices regularly.
  • Perform bank reconciliations between payments, bank statements and cash payments book at least monthly.
  • Keep records of any elections or estimates made, for example, private use of business assets.
  • Employee records
  • Ensure a Tax file number declaration (NAT 3092) is completed for each employee when they commence employment. One copy is retained for your records and the other copy forwarded to the Tax Office.
  • Make payments of wages by cheque or bank transfer. This helps keep track of your wages expenses.
  • Record payments to employees in a wages book on a regular basis.
  • The wages book should include such details as
  1. name of employee           hours worked
  2. pay rate                            gross payment
  3. net payment                     amount withheld
  • Superannuation contributions paid.
  • For superannuation guarantee payment purposes, records need to show for each employee/contractor
  1. name of superannuation provider
  2. amount of superannuation paid and how you worked out that amount (also keep records of any information that helped you work out the amount of superannuation you paid – this may include advice from trustees of superannuation funds to which you’re making payments)
  3. dates when contributions were made, and
  4. if you ever incur a superannuation guarantee charge, you also have to keep records of the amount you paid and how you worked out that amount.

The records you have to keep may differ depending on whether or not you pay superannuation under an award. This may include reporting your superannuation payments on your employees’ payslips. For more information, visit fairwork.gov.au

 

  • For choice of superannuation fund purposes, you need to maintain records that show you have offered your eligible employees a choice of superannuation fund. These records include
  1. evidence that shows you provided the Standard choice form to all your eligible employees
  2. the written information your employees provide when they nominate a fund
  3. receipts or other documents issued by the fund showing you have made superannuation payments for your employee to their chosen fund
  4. confirmation that your fund meets the insurance requirements, and
  5. details of employees who do not have to be offered a choice of superannuation fund.
  • For fringe benefits tax purposes, records need to show

 

  1. the taxable value of each fringe benefit provided to each employee
  2. the method of allocating the taxable value of a fringe benefit provided to two or more employees for reportable fringe benefits purposes, and
  3. that 100% of the taxable value of the benefits (other than excluded fringe benefits) has been allocated to employees in their payment summaries.

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