Good morning bloggers! Being Wednesday it is the workshop post again this morning. Remember, if you have any queries, please do not hesitate to contact me, or in this case if you need any of the documentation, it is available at a fee.
Regards
Nikki
A. 4. Archiving
It is a legal requirement that accounting records and balances be retained for at least five years from the date of the last entry therein. This is not only a legal requirement for businesses, but for you in your personal capacity as well. The Receiver has the right to ask you for any financial documentation going back five years and if you do not have the documentation they can fine you and charge you penalties and interest thereon. For example, this is the year 2007 and your income tax return has been submitted on time on an annual basis and you have received your rebate or paid your dues (whichever the case may be). Then you receive a notice in the post that your assessment for the year 2002 was re-calculated and your medical aid, expenses/fees need to be re-checked. Your assessment states that you claimed R20 000 worth of medical aid (you had some surgery that the medical aid did not cover) and they now want the proof thereof – however, you had a spring clean last year and you threw everything out. Well why not? You got back quite a nice rebate that year and so the Receiver must be finished with you – Yeah right! Now you can’t prove that you had those expenses, over and above you medical aid allowance and the Receiver disallows the rebate on the medical aid. This means that although you got back R5768.72 as a rebate, you now owe the Receiver R8326.24 and guess what – it has to be paid in the next 3 weeks! The burden of proof is on you. So please keep everything. It is your audit trail, it can save you lots of money if there is a query.
The frequency of your archiving will depend on the size of your business and the amount of paperwork, you generate. It’s best though, to file things firstly in date order, then in month order, then in year order. Most small to medium size businesses can get away with a years worth of work in a (printing paper) box. Mark the box clearly with, the year, and what the contents of the box are. For example “2003, 1. Cheque book stubs, 2. Bank Statements” and so on. If you take something out for whatever reason – remember to put it back exactly where you took it from. You don’t want to have to go through the whole box looking for a single little piece of paper that you’ve probably put back into the wrong year anyway!
A copy of archiving label for the boxes can be obtained from me directly, as well at the Archiving Retention periods.
It is a legal requirement that accounting records and balances be retained for at least five years from the date of the last entry therein. This is not only a legal requirement for businesses, but for you in your personal capacity as well. The Receiver has the right to ask you for any financial documentation going back five years and if you do not have the documentation they can fine you and charge you penalties and interest thereon. For example, this is the year 2007 and your income tax return has been submitted on time on an annual basis and you have received your rebate or paid your dues (whichever the case may be). Then you receive a notice in the post that your assessment for the year 2002 was re-calculated and your medical aid, expenses/fees need to be re-checked. Your assessment states that you claimed R20 000 worth of medical aid (you had some surgery that the medical aid did not cover) and they now want the proof thereof – however, you had a spring clean last year and you threw everything out. Well why not? You got back quite a nice rebate that year and so the Receiver must be finished with you – Yeah right! Now you can’t prove that you had those expenses, over and above you medical aid allowance and the Receiver disallows the rebate on the medical aid. This means that although you got back R5768.72 as a rebate, you now owe the Receiver R8326.24 and guess what – it has to be paid in the next 3 weeks! The burden of proof is on you. So please keep everything. It is your audit trail, it can save you lots of money if there is a query.
The frequency of your archiving will depend on the size of your business and the amount of paperwork, you generate. It’s best though, to file things firstly in date order, then in month order, then in year order. Most small to medium size businesses can get away with a years worth of work in a (printing paper) box. Mark the box clearly with, the year, and what the contents of the box are. For example “2003, 1. Cheque book stubs, 2. Bank Statements” and so on. If you take something out for whatever reason – remember to put it back exactly where you took it from. You don’t want to have to go through the whole box looking for a single little piece of paper that you’ve probably put back into the wrong year anyway!
A copy of archiving label for the boxes can be obtained from me directly, as well at the Archiving Retention periods.
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