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New Zealand small-business record-keeping means retaining enough reliable evidence to explain every business transaction and support your tax calculations. That includes cash and electronic sales, purchases, income, expenses, assets, liabilities and, where relevant, GST and employment records. You do not have to buy a particular organiser or accounting package: paper, electronic or mixed records are acceptable if they remain intact, retrievable and connected by a clear audit trail. Keep records for at least seven tax years after the end of the tax year they relate to, and do not destroy them while an audit, dispute or retention notice is active.
This checklist is a practical operating system for sole traders and other small businesses. Entity type, GST registration and employing staff change which sections apply. It is general information, not individual tax advice; check current Inland Revenue guidance for an unusual transaction or deadline.
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Start with one rule: if a document or data point helps show what the business earned, spent, owned, owed or claimed, keep it. Inland Revenue describes tax records broadly, rather than limiting them to formal tax invoices. Its record-keeping guidance says, “Keep all your records throughout the year. Everything is important.”
Your core file should contain:
- Income and sales: cash takings, electronic payments, invoices issued, point-of-sale reports, online-marketplace statements and other evidence of money received.
- Purchases and expenses: supplier invoices, receipts, bills, payment confirmations and a note of the business purpose.
- Bank and payment records: bank statements, card statements, merchant-service reports, deposit slips and cashbook or ledger entries.
- Assets and liabilities: purchase and disposal information for equipment, vehicles, property or other business assets; finance and loan documents; and records supporting year-end balances.
- Contracts and agreements: leases, service agreements, customer terms, insurance documents and any other document needed to explain an accounting entry.
- Stock or service records: inventory counts, cost information, work-in-progress details or records relevant to the services you provide.
The exact mix depends on your business model. A cash-based retailer needs dependable till and cash-reconciliation records; a consultant may need contracts, timesheets and invoices; a tradesperson may need job sheets, vehicle-use evidence and material receipts.
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How do I build a complete transaction audit trail?
A complete audit trail lets someone follow a transaction from its original evidence to the bookkeeping entry, account total and tax return. The following workflow is not a separate filing deadline; it is a way to make the statutory records usable.
- Capture the source immediately. Photograph or download a receipt, save the supplier invoice, retain the issued invoice and record cash sales rather than relying on memory.
- Add context. Enter the date, amount, payee or customer, account category, payment method and business purpose. For a mixed expense, record how the business percentage was calculated.
- Reference the source. Give the file or transaction a meaningful identifier so the underlying receipt or contract can be found from the ledger and vice versa.
- Reconcile regularly. Compare the bookkeeping record with bank, card, cash and payment-platform activity. Investigate missing, duplicated or unexplained items.
- Preserve changes. Keep correction notes, credit notes and amended entries rather than silently overwriting the original. This is particularly important for GST adjustments.
- Reproduce the totals. At year-end, your income, expense, asset, liability and tax-return figures should be traceable back to the supporting records.
Inland Revenue’s income-and-expense records guidance and its record-keeping page describe the documents commonly used to create this trail. Keep electronic information in a form that is intact and readily accessible for later reference.
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What is the practical checklist for every transaction?
Use this short test whenever money moves through the business:
| Check | What to retain | Why it matters |
|---|---|---|
| Sale or income | Invoice or sales record, payment evidence, customer or job reference | Supports reported income and explains deposits |
| Purchase or expense | Supplier invoice or receipt, proof of payment, business purpose | Supports a deduction; an unsupported expense may be disallowed |
| Cash transaction | Daily till or cashbook record, deposit slip and reconciliation | Connects physical cash to reported sales |
| Electronic transaction | Bank, card or payment-platform record plus source document | Shows the amount, date and counterparty |
| Asset or loan | Purchase contract, settlement or finance documents, disposal evidence | Supports depreciation, financing and year-end balances |
| Correction | Credit note, adjustment explanation and link to the original entry | Preserves an understandable history |
Business.govt.nz explains in its expense-claiming guidance that a claim can fail when the business cannot produce a record. Paying business costs from a dedicated business account where possible creates a clearer paper or electronic trail, but the account statement alone usually does not explain the business purpose of every payment.
What extra records do GST-registered businesses need?
If you are GST-registered, keep the taxable supply information and correction information needed to support each GST return, along with the underlying bank and transaction records. A “tax invoice” is not the only possible container: Inland Revenue’s GST guide (October 2025 edition) says required taxable supply information may be held across transaction records, accounting systems and contracts.
For each taxable sale or purchase, your system should make it possible to retrieve the relevant supplier or customer details, date, amount, GST treatment and any correction. Keep the records that substantiate the figures filed in the GST return, not just a summary of the return itself.
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For a sale of $200 or less including GST, the seller is not required to provide taxable supply information to the buyer. That exception does not remove either party’s responsibility to retain its own transaction record. Keep the till entry, receipt, payment record or other evidence needed to support your GST and income figures.
Registration is generally tied to a $60,000 turnover threshold. Official pages use slightly different wording (“more than” versus “$60,000 or more”), so use the threshold as a practical warning sign and check current Inland Revenue registration guidance for your circumstances, voluntary registration and edge cases. Review GST records before each return and retain supply corrections with the original transaction.
Which employment records must I keep if I have staff?
Employers need records that support their employer obligations, including payroll calculations and related schedules. Keep employment agreements, hours or attendance information where relevant, wage and salary calculations, leave and holiday records, deductions, payments, payday-filing information and correspondence that explains adjustments. The precise list depends on the obligations that apply to your workforce, so use Inland Revenue’s current employer and payroll guidance rather than treating this paragraph as exhaustive.
Store payroll records in the same retrievable system as other business evidence, with access controls for sensitive personal information. Reconcile payroll payments to the bank account and retain records of corrections, reimbursements and benefits. If you use a payroll service, make sure you can export the underlying records and reports for the full retention period; outsourcing processing does not eliminate the business’s need to retain supporting information.
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Should I use paper, digital or a mixed filing system?
All three can work. Choose the arrangement that captures every transaction, preserves source evidence and lets you retrieve it quickly years later.
| System | Strengths | Controls to add |
|---|---|---|
| Paper | Simple for low-volume businesses; easy to see original receipts | File by tax year and category, protect against loss, and maintain a matching cashbook or ledger |
| Digital bookkeeping | Searchable records, attachments, reconciliations and exports | Check that exports remain readable, retain source files and understand where data is hosted |
| Mixed | Useful when some suppliers or customers remain paper-based | Scan or index paper documents and apply one naming and reference convention |
Inland Revenue accepts paper and electronic records. Electronic records must preserve integrity and remain readily accessible. Current public guidance also says records stored offshore, including in cloud storage, require approval. Before adopting a hosted system, confirm where the data is stored and whether an approval application is needed; do not assume that a familiar cloud service automatically meets the rule. Records should be in English or Māori unless another language has been approved.
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A paper accordion file or invoice organiser is optional—not a tax requirement. Likewise, software is optional. Evaluate any system against six questions: does it capture cash and electronic activity; attach or file source documents; retrieve GST and correction information; preserve records for the retention period; produce a usable audit trail and export; and satisfy any offshore-storage condition?
How long do I need to keep business receipts and other records?
The general rule is at least seven tax years, counted from the end of the tax year to which the records relate—not seven years from the date printed on an invoice. Inland Revenue’s current record-keeping page states that all records, including electronic records, must be kept for at least seven tax years. Section 22 of the Tax Administration Act 1994 sets the statutory framework.
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At the end of each tax year, label the records by the year they cover and record the planned destruction date. Before deletion or shredding, check for open GST corrections, amended returns, financing or asset records still needed, and any formal notice. Preserve the original electronic file and metadata where they are needed to show integrity; a printed screenshot may not be an adequate substitute.
How should I separate business and private spending?
Keep business and personal costs distinct wherever practical. A dedicated account and card make reconciliation easier, but separation alone does not turn a private cost into a deduction. For a mixed expense—such as a vehicle, home office or phone—document the method and evidence used to calculate the business share. Business.govt.nz’s expense guidance emphasises that only the business-use proportion is claimable in examples such as vehicle costs.
For each mixed item, retain the total bill, the allocation method, dates or usage records supporting the percentage, and any review or change to that percentage. Revisit the allocation when the pattern of use changes. Never claim the whole cost simply because the payment came from a business account.
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What routine keeps records ready all year?
A small, recurring routine is more reliable than a year-end rescue exercise:
- As transactions happen: save receipts and invoices, enter the transaction, identify its purpose and attach or index the source.
- Weekly or fortnightly: check for missing supplier invoices, reconcile bank and payment-platform activity, and resolve uncategorised items.
- Before a GST return: review taxable supply information, GST treatment, credit notes and corrections; confirm the return totals agree with the underlying records.
- Monthly or quarterly: review unpaid invoices, asset purchases, loans, stock or work in progress, and mixed-use allocations.
- At year-end: reconcile all accounts, confirm assets and liabilities, prepare income and expense summaries from the same records, and archive the year with its planned destruction date.
Business.govt.nz’s tax-time guidance supports preparing throughout the year rather than trying to reconstruct transactions later. The routine itself is workflow advice; it does not replace any filing or payment deadline that applies to your business.
What changes for a sole trader, company or partnership?
The record principles are shared, but the supporting documents differ.
- Sole trader: retain business income and expense evidence, private-use allocations, asset and liability information and records supporting your individual business tax calculations. Self-employed people may also receive an annual ACC work-levy invoice; keep it with the related business administration records, but do not treat the invoice as a substitute for tax evidence. See the sole-trader checklist for broader obligations.
- Company: keep the company’s own sales, expenses, assets, liabilities, bank records, contracts and tax filings separately from shareholders’ personal spending, with records supporting any shareholder payments or reimbursements.
- Partnership: retain partnership-level transaction records and the agreement or allocation information needed to support each partner’s share.
- Any structure with staff: add the employment and payroll records described above.
- GST-registered entity: add taxable supply information, corrections and GST-return support regardless of whether the entity is a sole trader, company or partnership.
These categories are a planning framework, not a substitute for advice on your entity’s accounts, depreciation, fringe benefits or other specialised rules.
What are the common record-keeping failures and fixes?
- Only keeping GST invoices: fix this by retaining non-GST sales, cash records, bank evidence, contracts and asset information too.
- Relying on bank statements alone: add the invoice or receipt and a business-purpose note; a statement proves payment, not necessarily deductibility.
- Reconstructing cash sales later: record daily takings and reconcile deposits promptly.
- Deleting digital files when a subscription ends: export readable records and attachments before closure, then verify that the export can be opened.
- Mixing personal and business spending: use separate accounts where possible and document the business-use calculation for unavoidable mixed costs.
- Storing everything offshore without checking: confirm Inland Revenue’s approval requirements before relying on cloud or overseas storage.
- Destroying records exactly seven years after an invoice: calculate from the end of the relevant tax year and check for extensions, disputes or notices.
- Overwriting corrections: preserve the original, the correction document and an explanation of what changed.
If records are already incomplete, stop the gap from growing: secure existing bank and payment data, list missing source documents, contact suppliers or customers for copies, document reasonable allocations and obtain professional help where the reconstruction affects filed returns.
When should I get professional help?
Consider a qualified bookkeeper or tax adviser if you are catching up several periods, changing entity type, registering or deregistering for GST, employing staff for the first time, acquiring major assets, or facing an Inland Revenue query. A professional can help design categories and reconciliations, but you should still understand how to access and retain the underlying records. Verify any provider’s New Zealand qualifications, scope and current terms before engaging them.
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Bottom line: what must be true of my system?
Your system is compliant in practice when it captures all business transactions, retains the source evidence and context, supports GST and payroll obligations where relevant, separates private use, preserves an audit trail, remains accessible in an approved format and location, and keeps records for at least seven tax years after the relevant year. The method—paper, software or a combination—is your choice; completeness and retrievability are the obligations.
Frequently Asked Questions
Do I need an accountant or bookkeeping software to meet New Zealand record-keeping rules?
No. Inland Revenue accepts paper, electronic and mixed records, so a suitable spreadsheet, ledger and organised source-file system can be enough for a small operation. The test is whether the records are complete, intact, retrievable and able to support the tax figures; professional help is optional but useful for complex or overdue records.
Can I keep receipts as photos instead of paper originals?
Electronic records can be used if the information remains intact and readily accessible for later reference. Keep the image readable, preserve the relevant date and transaction details, use a consistent file name or reference, and retain any related invoice, credit note or contract needed to explain the entry.
What happens if a supplier never sends a receipt?
Record the transaction, retain proof of payment and contact the supplier for a copy or other source evidence. Add a contemporaneous note describing what was bought, when, from whom and for what business purpose; do not assume a bank line by itself proves that an expense is deductible.
Does the $200 GST exception mean small sales do not need records?
No. For a sale of $200 or less including GST, the seller may not have to provide taxable supply information to the buyer. Both parties still need their own transaction records to support income, GST and accounting entries.
Can I destroy records after seven years if Inland Revenue has contacted me?
Not automatically. An audit, dispute, investigation, objection, review or formal retention direction can require records to be kept longer; specified cases may involve an extension of up to three years. Keep the relevant material until the matter and any direction are finished.
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