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Good Small Business Book Keeping

One of the main causes of business failure is the lack of adequate business records.

If a full accounting program is not used properly it can end up as a computerised shoe box – more difficult to unravel than a manual one! If you have not got the time or inclination to study basic accounting then please do not use them at all!

The best time to capture the information about a transaction is when it occurs so write in the cheque stub (or butt) as much information as possible.


For business transactions it is essential to have good records. When you pay by cheque, you have both the cheque and the listing on the account statement as evidence of payment in addition to your invoices. When you pay by cash, you only have the documentation you are given by the business or person you paid. Consequently, a good filing system is essential so that you can provide evidence of your cash payments in the event of a tax audit.

Note that whatever accounting system you adopt, there is no need to account for private non assessable/deductible for GST (or income tax) receipts and payments and our strong recommendation is use another account or cash for private transactions to reduce your work load!

Valid tax invoices are required for all transactions if you wish to claim the GST input tax credit. If you do not have a valid tax invoice for any transaction greater than $55 including GST, then the payment must be listed as an amount with no GST in the price.

There are many quirks in the Australian GST tax system. For example GST will not apply to transactions that are "financial services" and these include bank interest and charges and there are a few special rules such as for new cars. You had better check with your accountant if any apply to you.

Split loan and hire purchase payments into principle and interest as each are treated separately for GST. The more columns in a cash receipts or payments journal the better so don’t be miserly when you set up your GSTJournal.

Treatment of Credit Card Payments

We recommend two alternatives for recording transactions you pay by credit card:

  1. Totally separate record:
    Keep a separate record for your credit card transactions by using another spreadsheet or payments journal book – In our GSTJournal up to four accounts are provided and they can be credit card rather than bank accounts.
  2. One line transactions:
    If you pay your credit card balance in full each month, record the payment to the account in the Total Account Payments column. Then breakdown the payment dissections into individual income or expense columns. The GST calculation could become a little difficult if there are a more than just few transactions and in this case us method 1.