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Three legal ways to keep your financial records and avoid trouble with SARS

by , 01 September 2014
If SARS decides to audit you, it'll want to inspect your financial records. It does this to determine if there are any mistakes in your finances and taxes.

If it finds any mistakes, it'll charge you with serious penalties. So you need to ensure all of your documents and records are up-to-date and that you store them correctly.

Yes, that's right! There's a right and a wrong way to store these records.

To avoid problems and show SARS how legally compliant your financial records are, keep them in one of these three ways...

These are the three legal ways you should keep your company's financial records

1.    You must keep records, books of account and documents in their original form, in an orderly fashion and in a safe place;

2.    You must keep them in either paper or electronic form that SARS specifies in a notice in the Gazette; or

3.    In a form a senior SARS official specifically authorised that's acceptable to the official concerned.

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You can decide which of these ways works best for your business

Choose the record keeping system that best suits your business.

But ensure your records always prove your income and expenses. You must keep permanent books of account as well as any other information to support these records, such as cheque stubs, paid accounts and bank statements.

SARS will want to see all of this information if it audits you. It'll also tell you if it wants the documents in a digital or hard copy form.

If it wants a digital copy of one of your older book records you can make a photocopy.

So ensure you keep your records in the right way and give them to SARS in the way it requests them.

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