16 financial records you must keep, or face two years in jail

Simangele Mzizi, Fsp Business, 27 Jan. 2015

Tags: financial records, vat act, record keeping, sars, financial records companies must keep

You must keep 16 of your financial records for five years in case SARS audits your business (Vat Act).

If SARS comes around and doesn’t find these records, it could penalise you. Or worse, prosecute you and you might get two years in jail.

Don’t let this happen to you – make sure you keep the following 16 financial records on file.

Here are the 16 financial records you must keep for five years

The Practical Vat Loose Leaf Service says you must keep:
  1. Ledgers;
  2. Cash books;
  3. Journals;
  4. All books of account;
  5. Till readings;
  6. Tax invoices;
  7. Creditor statements;
  8. Debit notes;
  9. Credit notes;
  10. Paid cheques;
  11. Cheque books;
  12. Bank deposit slips;
  13. Bank statements;
  14. Debtors’ lists;
  15. Creditors’ lists; and
  16. Financial statements.
SARS has the power to audit your business anytime, without notice, that’s why it’s important to always have your financial records available so it can satisfy itself that you’re complying with Vat law.
But that doesn’t mean you have to have hundreds of files locked away in storage. You can choose to keep them electronically, as long as you comply with SARS’ requirements.
Read on to find out what they are…
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Meet these requirements if you choose to keep your 16 financial records electronically

SARS has strict requirements for documents you keep electronically.
It requires you to keep the integrity of the electronic record according to the standards set out in Section 14 of the Electronic Communications and Transactions Act.
It also wants you to be able to:
  • Give it an electronic copy of the records in a format it can easily access, read and correctly analyse; and
  • Send SARS your records in an electronic format that is readily accessible.
Note that you must keep these 16 financial electronic records here in South Africa.
If, for some reason, you want to keep electronic records outside South Africa, you can ask a senior SARS official to give you permission.
These records are the life-blood of your business. Never look at the legal requirement of keeping them as an extra burden. Practice good record keeping habits so everything is always in order.
Now that you know about these 16 financial records, keep them for five years and make sure they’re easily accessible if SARS comes knocking. This way, you won’t face jail time.
PS: For more information on record-keeping, check out the Practical Tax Loose Leaf Service.

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