ATO Community

which one I have to use accounting software by law?

Initiate

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Replies 2

Dear Officer:

I am a sole trader and a micro employer with up to 4 employees. My needs are very basic, just interact with my client (sending invoices and check payments), employees (give payments, payslip, PASY withholding, timesheet, etc.), and ATO (generate required documents, keep records, fulfill obligations).


From research, I found, as a sole trader, I need invoicing, bookkeeping, and payroll three main systems.
For payroll, I found Free Accounting Software (FAS), free and seems to satisfy all needs (I'm still researching).
For bookkeeping, the ATO app (my deductions) is free. Some bookkeeping software can connect to the bank to automate the spending and income but since I didn't find a free one. Can I stick to the ATO app?
For tax invoices, I am using Microsoft Word and doing everything manually. Is this legal as long as I include all essential information? Do I have to use e-invoicing software since I didn't find a free one? My needs are very simple, just 1) generate the invoice, 2) send it to my customer via email, and 3) send it to ATO. My client is in China so I don't need an access point to send to their accounting software. And They are paying online

I consulted ATO officers about software, they said I need to connect the software with them to be legal, or the records will not be acknowledged. I wonder which step I have to use the software? Thank you!!

Kind regards,
Limin

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 1

Hi @sharkdeng,

 

You've certainly thought a lot about what your business needs - now let's get those last little ties all sorted out to hit the ground running with it Smiley Happy

 

We don't have rules or laws in place for which software you use.

 

For single touch payroll (STP), so long as you connect your software to us, we don't mind which software you use. We have a list on our website you can look through to find one that suits your needs. This is the only one you need to connect to us. You'll also need to report the SuperStream way. The easiest way as a micro employer is by using the Small Business Superannuation Clearing House.

 

For bookkeeping, you don't need a software. You don't even have to keep records electronically if you don't want. You just need to be sure your records meet our five rules of record keeping, which are:

 

  1. You need to keep all records related to starting, running, changing, and selling or closing your business.

  2. The relevant information in your records must not be changed. They must be stored in a way that protects them from being changed or damaged.

  3. You need to keep most records for five years.

  4. You need to be able to show us your records if we ask for them.

  5. Your records must be in English or able to be easily converted to English.

 

For tax invoices, you'll just need to enure that the information in the invoices meets our seven (or eight) requirements. The requirements change depending on the value of the sale, so check our website for the details. You don't need a specific software.

 

You can read more about each of these on our website:

2 REPLIES 2

Most helpful response

ATO Community Support

Replies 1

Hi @sharkdeng,

 

You've certainly thought a lot about what your business needs - now let's get those last little ties all sorted out to hit the ground running with it Smiley Happy

 

We don't have rules or laws in place for which software you use.

 

For single touch payroll (STP), so long as you connect your software to us, we don't mind which software you use. We have a list on our website you can look through to find one that suits your needs. This is the only one you need to connect to us. You'll also need to report the SuperStream way. The easiest way as a micro employer is by using the Small Business Superannuation Clearing House.

 

For bookkeeping, you don't need a software. You don't even have to keep records electronically if you don't want. You just need to be sure your records meet our five rules of record keeping, which are:

 

  1. You need to keep all records related to starting, running, changing, and selling or closing your business.

  2. The relevant information in your records must not be changed. They must be stored in a way that protects them from being changed or damaged.

  3. You need to keep most records for five years.

  4. You need to be able to show us your records if we ask for them.

  5. Your records must be in English or able to be easily converted to English.

 

For tax invoices, you'll just need to enure that the information in the invoices meets our seven (or eight) requirements. The requirements change depending on the value of the sale, so check our website for the details. You don't need a specific software.

 

You can read more about each of these on our website:

Initiate

Replies 0

Dear Officer:

 

@BlakeATO 

Thank you for your detailed answer. It is really enlightening and helpfull!!

 

Kind regards,

Limin