Should Your Business Keep Records Electronically?
Keeping important records is crucial for all businesses. It’s not only so you can monitor the progress of your company, but so you won’t experience any legal and tax issues in the future. One of the most efficient ways of record-keeping is doing it electronically. It should come as no surprise, especially that a considerable part of a business’ operations is done this way, too.
In this article, your trusted business accountants in Gold Coast will tell you why you should keep electronic records, some disadvantages, and what types of records you can store in your system:
Why Store Your Records Electronically?
One clear reason you should keep electronic records is that it makes things a lot more efficient. When you store your documents in an electronic system, you can effortlessly search and access them when needed. You can submit reports faster, as well. Best of all, you won’t have to worry about what you’ll do if the physical copy of the record gets lost or damaged.
When you store records electronically, you are effectively moving towards becoming a paperless work environment, which is helpful to the environment. You can also share the files with anyone in the company who might need them in seconds. For example, when your business accountant requests copies of invoices or receipts, you won’t have to send them a box full of paper! You can simply email them the files that they need—it makes everyone’s tasks so much easier.
Electronic filing comes highly recommended by the Australian Taxation Office. Because it’s highly possible that the ATO would require you to submit necessary records in the future, it’s best that you do have them all stored systematically.
Are There Disadvantages?
While the advantages are evident, keeping records electronically does have its drawbacks, too. For one, there’s a privacy and security risk, as there is with anything you do on computers. Someone could access sensitive information. However, with proper security measures, this risk becomes significantly lower.
Your files could get corrupted, and you might lose them. The likelihood of this happening is slim but there’s still a possibility. That said, this disadvantage is solved by simply doing backups. New Wave Accounting, your reliable small business accountant, suggests that you do backups immediately after adding an item to your records to avoid losing any record.
Depending on the software you’re going to use, you may have to pay a subscription fee. There are some that may be free to use, but paid ones do offer some features that you might want to use.
There may also be a learning curve when you first shift to electronic record-keeping, but you can surely get the hang of it soon enough.
What Kinds of Records Can You Keep Electronically?
There are no rules that tell you what records you can’t keep. However, these are the most important ones that you should have an electronic record of:
· Records of all the transactions related to opening your business
· Invoices, purchases, payslips, and anything else related to running your business
· Records of any changes you make to your business
· Records related to selling or closing your business
The benefits of electronically keeping your records should give you enough reason to give it a try. Switching from manual record-keeping to electronic may seem overwhelming at first, but having a clear goal and the right software can help make the process of transferring your records to digital easier. Of course, you can ask your trusted accountant for advice regarding this, too.
New Wave Accounting can provide you with a reputable accountant in Gold Coast who can help you determine which records you should keep, especially those that are related to your taxes. Contact our experts today and find out who we can help your business!