Good records show you how your business is really doing. They also keep you on the right side of SARS. Here is what to keep, for how long, and how to make it easy.
Why record keeping matters
- See your real profit and cash flow
- Spot problems before they grow
- Claim every deduction you are entitled to
- Support loan, finance and VAT applications
- Prove your numbers if SARS asks
What records should you keep?
- Sales invoices and credit notes
- Supplier invoices and receipts
- Bank statements
- Payroll records, including payslips, PAYE and UIF
- VAT invoices and VAT returns
- Loan agreements and a list of your assets
- Company documents, such as your CIPC registration
- Tax returns and letters from SARS
How long must you keep them?
SARS requires you to keep supporting documents for 5 years from the date you submit the return. Electronic copies are fine, as long as you can open and print them when SARS asks.
How to keep good records
- Use cloud accounting software such as Xero. Bank feeds and receipt capture do most of the work.
- Capture transactions weekly, not once a year.
- Reconcile your bank account every month.
- Keep business and personal money in separate accounts.
- Back up your files.
What goes wrong without them
You can miss deductions, underpay tax and face penalties and interest. It also makes it harder to get credit. In one case, SARS was in correspondence with a business for over 6 years. The business could not produce the documents SARS asked for, and SARS issued a hefty fine and penalty.
Need help?
We set up and maintain your records so you are always SARS ready. Contact us to get started.
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