Why record keeping matters
Good records are what let you answer a SARS query, defend an input VAT claim, or get a loan in a hurry. Bad records mean you pay more tax than you should, miss deductions, and spend weekends before a deadline sorting through paper.
The minimum records to keep
- Copies of every invoice you issue, and every invoice you receive.
- Proof of payment for money in and money out — bank statements, EFT confirmations, slips.
- Cash slips and petty cash records.
- Salary and payroll records if you employ anyone.
- Contracts, quotes and delivery notes that support the invoices.
- VAT returns and supporting workings if you are VAT registered.
How long to keep them
SARS generally requires records to be kept for five years from the date of submission of the relevant return, or from the date the return was due — whichever is later. For assets like vehicles or equipment, keep the records for five years after the asset is disposed of.
Five years is the rule of thumb. If you are unsure about a specific transaction, keep it longer rather than shorter. Digital copies are fine as long as they are complete, readable and backed up.
Paper vs digital
| Approach | Pros | Cons |
|---|---|---|
| Paper files | Simple, no tech required | Easy to lose, hard to search, takes space |
| Scanned PDFs in folders | Searchable, backed up, SARS accepts digital | Needs discipline and a naming convention |
| Cloud accounting software | Automatic, linked to bank, reports at click | Monthly cost, needs setup |
A simple weekly habit
- Collect every receipt, invoice and slip from the week.
- Capture them into your system with the date, amount, supplier and what it was for.
- Match them against your bank statement.
- File the digital copy with a clear name: YYYY-MM-DD — Supplier — Amount — Description.
- Reconcile at month end before you do your VAT or management accounts.
Common mistakes that cost money
- Claiming VAT without a valid tax invoice.
- Mixing personal and business expenses in one account.
- Losing receipts for cash purchases.
- Not reconciling the bank account monthly.
- Keeping records on one laptop with no backup.