ATO Record Keeping and Receipts: What Small Businesses Keep

Receipts are dull until one goes missing and costs you a GST credit or a deduction. This guide covers the record keeping basics for small businesses: how long to keep records, whether digital copies count, and what a valid tax invoice needs to show.

In short

The ATO says you need to keep most business records for 5 years.
Companies have a separate obligation: ASIC says companies must keep financial records for at least 7 years.
Digital copies of paper receipts are accepted if they are true and clear copies of the original.
To claim a GST credit on a purchase over A$82.50 including GST, you need a valid tax invoice.
A tax invoice must show specific details, including the seller’s ABN and the GST amount.

How long to keep records

The ATO’s overview of record keeping rules for business sets out five rules. One of them is that you need to keep most records for 5 years. The 5 years generally starts from when you prepared or obtained the record, or completed the transaction it relates to, whichever is later.

Some records need to be kept longer. The ATO lists these on its page about records to keep for longer than five years. Examples include:

records for depreciating assets and capital gains tax assets, which you generally keep for as long as you own the asset plus 5 years after you dispose of it
records used to work out a tax loss you carry forward to a later year
records connected to an assessment that is amended, where the period of review runs longer

Companies: 7 years

If you trade through a Pty Ltd, there is a second rule to follow. ASIC’s company record keeping page says companies must keep financial records for at least 7 years. This comes from section 286 of the Corporations Act 2001. The ATO itself points this out and recommends checking the record keeping requirements of every organisation you deal with.

For a company, the simple approach is to keep everything for at least 7 years, and longer for assets and losses.

What counts as a record

The ATO says your records need enough information to show the essential features and purpose of each transaction. The minimum is generally:

the date, amount and description of the transaction
the GST information
the purpose of the transaction
the relationship between the parties, where relevant

You also need to keep records of any choices, estimates or calculations you make for tax, and how you made them. A bank statement alone shows that money moved. It rarely shows what you bought or whether GST was included, which is why receipts and invoices matter.

Records must be in English, or able to be easily converted to English, and stored so they cannot be changed or damaged.

Are digital copies fine?

Yes, with conditions. The ATO’s page on digital record keeping says it accepts images of paper records saved digitally, provided they are true and clear reproductions of the originals and meet the five record keeping rules. Once you have saved the image, you do not have to keep the paper version unless another law requires it.

A few practical points from the same guidance:

Typing the details into your accounting software is not enough on its own. You still need to keep a copy of the actual receipt or invoice, digitally or on paper.
If you use cloud storage, download a complete copy of your records before you change software providers and lose access.

ASIC takes a similar view for company financial records: they can be electronic, but you must be able to produce hard copies within a reasonable time if asked.

Tips for photographing receipts

Capture the whole receipt, including the supplier name, ABN, date and GST line.
Photograph thermal paper receipts quickly. They fade.
Store them somewhere backed up, linked to the transaction they belong to.

When you need a tax invoice to claim GST

If you are registered for GST, you can usually claim a credit for the GST included in business purchases. The ATO’s page When you can claim a GST credit sets out the conditions, including that you must have a tax invoice from your supplier for purchases that cost more than A$82.50 including GST.

Key points from that page:

Your supplier has 28 days to provide a tax invoice after you request one.
Wait until you have the tax invoice before claiming the credit, even if that pushes the claim into a later BAS period.
For purchases of A$82.50 or less including GST, a tax invoice, cash register docket, receipt or invoice will do.
An invoice with incorrect or incomplete information is not a valid tax invoice, although you may be able to rely on other documents from the supplier to fill the gap.
A 4-year time limit applies to claiming GST credits.

It is also worth checking that the supplier is registered for GST using ABN Lookup.

What a valid tax invoice shows

The ATO’s tax invoices page lists what a tax invoice must include. For taxable sales of less than A$1,000, it must contain enough information to clearly determine these 7 details:

That the document is intended to be a tax invoice
The seller’s identity
The seller’s ABN
The date the invoice was issued
A brief description of the items sold, including quantity (if applicable) and price
The GST amount (if any), either shown separately or, if GST is exactly one-eleventh of the total, a statement such as “Total price includes GST”
The extent to which each sale on the invoice is taxable

For sales of A$1,000 or more, the invoice must also show the buyer’s identity or ABN.

A tax invoice does not need to be on paper. A PDF sent by email is fine as long as it contains all the required details.

Worked example

You buy a laptop from an Australian retailer for A$2,200 including GST. To claim the A$200 GST credit, you need a tax invoice that shows the retailer’s name and ABN, the date, a description of the laptop and its price, the GST amount or “Total price includes GST”, and, because the sale is over A$1,000, your business name or ABN. A card receipt showing only the total is not enough.

A simple receipts checklist

Every business purchase has a receipt or invoice saved
Purchases over A$82.50 including GST have a valid tax invoice before you claim GST
Invoices over A$1,000 show your business name or ABN
Receipts are linked to the matching bank transaction
Records are backed up and exportable if you change software
Company records kept for at least 7 years, other records for at least 5

Questions

Can I throw away paper receipts after scanning them?

Generally yes. The ATO accepts digital images that are true and clear copies of the original. Check that no other law you are subject to requires the paper copy.

Is a bank statement enough as a record?

Usually not on its own. It shows the date and amount but not what was bought or the GST. For purchases over A$82.50 including GST, you need a tax invoice to claim the GST credit.

What if a supplier will not give me a tax invoice?

Ask in writing. If the supplier does not respond within 28 days and you cannot find the details in other documents, the ATO explains how to ask its permission to treat another document as a tax invoice.

Do overseas software invoices need an ABN?

Overseas suppliers that are not registered for Australian GST will not have an ABN, and you cannot claim GST credits where no Australian GST was charged. Keep the invoice anyway as a record of the expense.

How Foderis helps

In Foderis you can forward receipts by email or photograph them on your phone, and AI reads the details for you to confirm. Your records are hosted in Sydney, your accountant can be given access, and you can export all your data at any time, which helps if you ever change software. Foderis costs A$9 a month, with a 30-day free trial.

This is general information, not tax advice. Your situation may differ: check with your accountant or the ATO.