Although this automated data matching purportedly is for the benefit of the taxpayer, by facilitating pre-filled data on government portals (such as myGov), it also facilitates data audit. When there is a data mismatch between the lodged tax return and the information held on file by the ATO, it raises a red flag and could result in a data override or audit. Because of all this data and increased audit activity, it is more important than ever before to ascertain full compliance with legislative and regulatory requirements, particularly when it comes to document keeping.

Gone are the days of shoeboxes full of printed receipts, but how should we maintain data in this technological age? How you keep records should be suitable to your specific circumstances. In this post, you will find a number of different ways for record-keeping.

Ask Us

As qualified accountants and registered tax practitioners, we keep up to date with all the current legislative and regulatory requirements for record-keeping. We offer our clients an easy to use form with common examples of work-related deductions, and which criteria they must meet. For logbooks or professional use schedules, we offer templated worksheets, and actively engage with our clients to get the most out of their tax deductions. We may even refer you to a preferred third-party provider to help you establish even greater taxable deductions, such as a Quantity Surveyor for depreciation on your investment property. All our fees are tax-deductible, so by asking for help, you’ll pay less tax.

myDeductions App

The ATO has issued the myDeductions App. This is a free app that can be downloaded from the Apple app store or from Google Play. This app is great for simple employment-related expenses, tracking your superannuation and inputting logbooks (such as the vehicle 12-week logbook). The app has a 3.9 star rating, but many users report issues related to data retrieval, instability of the app (such as the app crashing), issues with back-ups, and inability to send the information to an accountant. This app can be used for taxpayers working as an employee, or as a sole trader.

Cloud Storage

Cloud storage can be a great way to store receipts and invoices while on the go. Providers such as Box, Google Drive and DropBox are some examples of commonly used cloud storage providers. The benefit of using cloud storage is that access can be provided easily to the accountant at year-end. It however does not have algorithms identifying what expenses are deductible, and which ones aren’t (such as the myDeductions app), nor does it have pre-set logbooks for professional use schedules, such as phone or home office use, but in general it is easier to configure and setup, and more reliable in its use.

These cloud storage drives are great when you’re starting out as a sole trader, or simply have a number of work-related expenses that you’d like to claim on your tax return.

Xero Cloud Accounting Software

As a Xero firm, we may be biased, but we absolutely love working with Xero cloud accounting software. We love it so much is because it is user friendly, easy to navigate, and can be used from mobile devices while you’re on the go. As a busy business owner, you can invite our accounting team to facilitate all business services remotely. Xero subscriptions come with a free HubDoc subscription, which captures source documents, and uses machine learning to accurately extract data from uploaded documents, in real-time.

The extracted data is fed into Xero automatically and shows in “draft bills” with the source document attached. This makes it easy for us to review and approve the expenses, and reconcile them against your bank transactions through bank feed.

Xero cloud accounting is perfect for growing small to medium-sized businesses. It has various jurisdiction settings and can offer cloud accounting services tailored to Australian, New Zealand, UK, US, and South African businesses. The “Xero Global” version perfectly supports businesses that operate in other countries, such as the Netherlands. This way you can invite the best accountant for your international business, even if that means your accountant is on the other side of the world.

QuickBooks Online Accounting Software

QuickBooks Online is the main competitor of Xero, but predominantly has a major market share in the US, where Xero is less popular. The differences in market share are vastly due to the fact that QuickBooks was established in the US far before Xero came along, and Xero, unfortunately, doesn’t currently offer US tax software. QuickBooks Online does integrate with a variety of US tax integrations, such as TurboTax. QuickBooks has teamed up with Dext (formerly ReceiptBank). Dext operates in a similar manner to HubDoc, where it captures source documents that are fed into QuickBooks for reconciliation.

QuickBooks Online has a cheaper online subscription, but can be considered less user friendly for the small business owner. Common complaints relate to the difficulty setting it up, login process, and users have reported an inability to delete their account. TurboTax is also not suitable for US expatriate tax filing.

How Taxably Can Help

As a digital tax and accounting practice, we know a thing or 2 about record keeping. We are a 100% paperless practice, born in the cloud, and offer multi-jurisdiction tax services. We are the expert in international taxation and can assist expatriate business owners with their international business affairs and record keeping. Contact us here for more information.