Operating a small printing business has become more complex and frustrating than 20 years ago. Government regulations and tax laws require more checks than ever before. The Tax Act, for example, is 60 times longer than when first introduced in 1937. Employment-related regulation and environmental laws are now more complex. 

Larger businesses can take changes in their stride. They have staff and resources. But SMEs find paperwork problematic and costly. For business owners, there are two problems with paperwork: finding the time and understanding compliance obligations.

Still, compliance with rules and regulations can have positive flow-on effects for businesses, even though the time taken to meet them can seem excessive. The more you understand the rules of compliance, the less likely you will be caught off guard.

Secondly, much of it should be easier now because much of it, from paying bills, to statements to superannuation, is electronic. Still, if you have papers you must keep, you need a filing system. How you break it up is up to you. You can classify it according to the companies to which the bills are paid or you can have particular categories. Anything computer-related, for example, goes into the computer folder, anything car-related goes in the car folder and so on. Some have a file for all banking activities and another for all administrative activities such as repairs and insurance. Every company has its own system. Also, it is a good idea to keep these in one central location. A good filing cupboard or box is usually inexpensive and one of the better investments you can make.

Being organised is critical. Good business systems keep compliance costs low and good record keeping reduces the time needed to gather financial information for tax compliance. Solid workplace practices also ensure fewer accidents and cuts downtime through staff losses. Ensuring equipment and processes are up to standard encourages efficiency and ensures compliance.

It is also important to set up systems that work. First, when getting the year’s receipts and tax invoices in order, ensure there is a description of the goods or services you sold on the invoice and what was bought on the receipt. That would allow your accountant to determine income for tax purposes and deductibility. List every asset you use to make your income, for example, computers. Make sure to include depreciation claims made on that asset in previous years and have the receipt or contract for each asset and for any costs incurred. These can include legal costs, setting up costs, transport, and cost required to get the asset into a condition and location to produce income.

You need to show your accountant any dividend statements you received and any shares you sold, as well as the date the shares were bought and sold. If you have a rental property, you need to ensure you collect all the necessary receipts and invoices from that. Documentation of repairs should fully explain the work carried out. A repair is immediately deductible but an improvement is depreciated over time.

If you sold an investment property during the financial year, all relevant contracts for the sale and the purchase need to be presented. The same goes for other documents such as the cost of renovations and other improvements. All go to your accountant.

Leon Gettler is a senior business journalist who writes for a range of leading newspapers and journals

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