To help SARS understand your offshore electronic record keeping system, compile a document with these seven points

Simangele Mzizi, Fsp Business, 02 Feb. 2015

Tags: sars, electronic record keeping system, accounting records

Normally, you must keep all your accounting records in South Africa.

SARS will only allow you to store them outside the country if you meet certain conditions.

One of these is that if you custom design the software and electronic platform to store your records, you must keep all your manuals. If you no longer have these, you must have a document that explains your record keeping system. This way, SARS can understand what you did.

Here are the seven points this written document must contain…

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Your accounting records are your business’s Holy Grail!


Without them, your business can’t continue to run. Management won’t be able to make informed decisions regarding the future of the business if details about the company’s past aren’t available.

You must back up your records and make sure they’re kept securely. Chapter A01 of the Practical Accountancy Loose Leaf will show you:

  • What are accounting records?
  • What do accounting records generally consist of?
  • Why it’s important for you to keep accounting records
Here are three risk areas to watch out for…


Include these seven points when you describe how you’ve stored accounting records in your overseas electronic record keeping system

The Practical Accountancy Loose Leaf Service says your document must include information about:

#1: How you create, process and store your transactions.
#2: The reports you generate and how you generate them.
#3: How often you store your electronic records.
#4: The format you use to store and archive your records. You must include a description of what media, software and hardware you use.
#5: Where you physically store and archive your records.
#6: What procedures you have in place to make sure no one deletes, alters and destroys your records without authority.
That’s not all.
#7: You must also include data dictionary that explains how you index your records as well as when you created, processed, stored and backed them up.

Remember, if you store your records overseas, you must be able to access them from SA too

As you know, SARS regularly conducts audits and inspections.
When it comes around, it expects you to have your accounting records readily available.
Since yours are in an electronic format, it wants you to have:
  • All the electronic signatures, login codes, keys, passwords or certificates you need to access the electronic records; and
  • A document with the seven points above so it can understand your record keeping system.
To be on the safe side, store everything about your electronic record keeping system for a minimum of five years.
SARS reminds you on its website that keeping your records correctly won’t only help you comply with the requirements of the TAA, they help to satisfy it that you’re complying with the requirements. This way, you’ll avoid penalties.
Now that you have the know-how, compile a document to help SARS understand your overseas electronic record keeping system for your accounting records.
PS: We strongly recommend you check out the Practical Accountancy Loose Leaf Service. It shows you how to deal with SARS, improve your cash flow, eliminate simple accounting mistakes, analyse your financial statements, identify errors, slash your audit fees and eliminate fraud in your company.

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