Legal Obligation for
Australian
Taxation Recordkeeping
Every year there is a legal
obligation for all companies (small, medium
and large) and government agencies to report their earnings/losses to
the Taxation Office.
Some companies are able to rely on their financial reporting systems to
print the necessary statements, balance sheets and audit reports.
While other must produce the reports from a hybrid environment of an
accounting system with hardcopy records. The auditing of
these reports can require additional documents to certify what has
transacted. These documents are usually hardcopy that are usually
held in archive boxes stored within a compactus or storage
facility. The task of locating
these documents can take 10
minutes to 2 days depending how well organised the files are
within the
archive boxes. Once the auditor has completed the work these files are,
eventually, returned to an archive box, not necessarily the same
archive box they were originally stored in.
Most large companies and government agencies implement an Electronic
Document & Record Management Systems (EDRMS) to manage the storage
and archiving of both electronic and hardcopy documents. Whereas, the
Small Medium Enterprises (SME) have hardcopy records usually stored in
archive boxes or filing cabinets and electronic documents stored on a
PC or fileserver.
Every year these companies and government agencies can destroy all
taxation records that are 6 years old ie 5 years after the year
in
which the transaction occurred or was reported. This can be
extremely time consuming to locate all those hardcopy records that have
been retrieved and stored in different boxes or locations to free up
valuable space to store the current year's records.
There are 6 simple
steps to achieve the goal of full compliance for
taxation recordkeeping without large capital costs and ongoing labour
issues. These steps are:
- Process the invoices, orders and employee expenses into your
accounting systems
- Endorse the processed documents with the document ID or
transaction
ID from your accounting system (can be handwritten [legibly])
- Scan hardcopy documents (recommend outsource service for higher
quality images at a lower life-cycle cost)
- Index using document ID
- Store on CD or on fileserver within an EDRMS or a simple text
based
image retrieval engine (suggest trying Inmagic DB/TextWorks [simple and
very cost effective])
- Securely destroy the original
Can I really
destroy these files and still meet my legal obligation?
Extract from TR 2005/9 Storage of
paper records in electronic form
"12. A business using either a manual
or a computerised accounting
system may want to store and keep paper records in electronic form.
Where paper records are produced or received in the course of carrying
on business, the Tax Office accepts the imaging of those records onto
an electronic storage medium provided that the electronic copies are a
true and clear reproduction of the original paper records. This would
include documents which have been entered into a Capital Gains Tax
asset register under Division 121 of the ITAA 1997 and have been
converted to an electronic copy.
13. Where paper records are imaged
and stored electronically the
requirements of section 262A are satisfied if they are:
- not altered or manipulated once stored;
- retained for the statutory period of five years; and
- capable of being retrieved and read at all times by Tax Office
staff"
There are other articles on admissibility of computer produced records,
Fringe Benefit Tax record keeping and Workers Compensation records
Want more information or assistance then click here
Alternatively go directly to http://www.scan2archive.com.au
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