Record keeping is essential and will help you to pay the correct amount of tax.
The purpose of record keeping is to ensure that you can explain how you worked out your PGST returns. Records are also important to explain your business profits tax transactions as well as keeping track of your business performance generally.
What you need to know
What records you must keep for PGST
As a PGST registered business you are required by law to keep all the following PGST transaction related records:
- all PGST invoices, credit notes, and debit notes received (expenses)
- all PGST invoices, credit notes, and debit notes given (sales)
- any recipient-created PGST invoices in respect of supplies of imported services received
- records of imports of and exports of goods (if provide exempt supplies).
These documents should be kept in chronological order.
What records you must keep for BPT
For BPT you need to keep all accounts, documents, and records that demonstrate how you calculated the business profits tax payable (or loss).
These include a daily record of all:
- Cash receipts showing the date, total cash receipts, cash sales payments on accounts receivable and miscellaneous receipts – you need to keep supporting documents such as cash register tapes, sales, slips, receipts, and other documents relating to cash received.
- Credit sales showing, date, name of purchaser, invoice/receipt number, amount, and discount (if applicable) – you need to keep supporting documents such as sales invoices or receipts, kept in chronological order for examination by BRT. You must also keep detailed records of wages and salary paid to employees.
- Expenses showing date, payee, invoice number, amount discount (if applicable), and purpose of payment– you need to keep supporting documents such as cancelled checks, receipts, invoices, or other evidence of cash disbursed, kept in chronological order for examination by BRT.
How long to keep your records
When registered for PGST, you must keep the required records for a minimum of 3 years and the records must be kept in chronological order.
How to keep, archive, and retrieve records
You do not have to keep your records in any specific way or format, but they must be kept in a suitable way that enables the BRT to easily check the validity of the data which has been used to complete a tax return.
Records must be readily available
You can keep records on or off-premises, or even on the cloud (the practice of using a network or remote servers hosted on the internet to store, manage, and process data, rather than a local server or personal computer).
You can choose your own way to store your business records, however, you are responsible for making those records available in a legible format and in a timely and efficient manner when requested by the BRT.
Acceptable document archiving methods:
- original documents
- electronic documents (originals or copies)
- photocopies of original documents
- other ways of recording and preserving the information or data contained in the original document.
Getting the basics right
Help and support tips for record keeping
Here are some general record-keeping rules that apply to all records your business needs, to help you meet your tax obligations and stay on top of running your business.
It is important that you understand record-keeping requirements for your business and keep up to date with your record keeping.
Good record keeping will help you:
- keep track of your income and stock levels
- know what expenses you incurred
- make informed business decisions
- prepare for filing tax returns etc.
The following tips can help you get it right. They are based on common record-keeping errors we see in the BRT:
- Keep accurate records of all cash and electronic transactions.
- Reconcile cash and electronic POS sales regularly and enter the amounts into your business accounting software system, spreadsheet, or cash books. We recommend you keep on top of this, so, depending on your business activity, it may be done daily, weekly, or monthly.
- Ensure you have sufficient records to substantiate business expenses claimed as tax deductions.
- Check for mistakes if things don’t add up. It saves time later.
- You generally need to keep most records for 3 years.
Tips and best practices – going digital
Have you thought about going digital to help with easy, simple recording keeping? There are a number of options available.
Business/accounting software in the Cloud
Consider using online business/accounting software that is accessible from any device with an internet connection at any time. You can enter transactions on the go and upload supporting documents in a centralized cloud database that is automatically backed up.
Cloud software can also integrate with a whole ecosystem of business apps, so you can capture PGST records from emails, scanning apps, pictures and more.
Mobile or cell phone apps
Do you currently use a mobile, or cell phone? If the answer is yes, there is good news; mobile apps are available and this may be an option for you to help save you valuable time, so you can concentrate on running your business. Most cloud business/accounting software come with a mobile app that enables users to scan, upload, and claim expenses.