When using an ABN you are operating as a ‘sole trader’ which means you are a business in the eyes of the ATO. This means whilst you are more in control over your work, you must ensure you adhere to what the ATO says. It’s important to be organised and has effective record keeping to ensure when the end of the financial year comes around. This way you know exactly what you need to pay and submit to the ATO.
We went deeper into what you need to manage and effective record-keeping systems to use.
What do I need to keep when using an ABN?
When operating a business under and ABN its recommended by the ATO to keep records of your business. This includes
- A register of your jobs or shifts worked including date, time, service provided, rate charged and total charge.
- A record of remittance of payment.
- A record of anything you have purchased for use when working with your ABN (items or services purchased that were essential for business – this can be claimed later on tax!)
- Bank Records
- Any relevant documentation regarding your business (ABN certificate, ABR certificate etc)
The ATO suggests you keep these records for a minimum of 5 years and ensure they’re easily accessible in case of an audit.
For more on what exactly you should keep the ATO has a record-keeping tool that can give you more details for your specific case. https://www.ato.gov.au/calculators-and-tools/record-keeping-evaluation/
How do I keep records?
Setting up an effective record-keeping system may sound tedious and difficult but once you put in the effort it is there for life. A few small hours of work is worth it as you can set and forget as long you adhere to the process you have set.
There are a few systems for managing records.
- Use an online tax system such as https://airtax.com.au to keep tax records and help you with EOFY tax submission to the ATO
- Online record-keeping systems
- Online storage systems such as Google Drive in case of data corruption/computer crash
Effective record-keeping skills are a great tool and are the way to prevent or be prepared for any surprises that may arise. Working with an ABN can be empowering and lead to great business-building but effective record keeping skills are necessary.
If you have any more questions or want to request any previous shifts, please contact us at https://about.tappon.co/contact
The above is only general advice. It’s always good to speak with an accountant, the ATO or an industry professional for advice and management of an ABN.