Winter is coming: Timely reminder of the importance of having accurate and current company records

Read this article as your reminder to ensure that your company is maintaining accurate and complete financial records.

Whilst this responsibility is often overlooked, the Corporations Act 2001 (Cth) obliges all companies to maintain written financial records that truthfully record its dealings, financial position and performance. This permits and ensures transparency and accountability.

While ensuring their accuracy can be challenging and time consuming, the benefits are significant. Accurate records help you understand and monitor your company’s financial health, allowing you to make informed decisions regarding its direction.

They also facilitate tracking key information, such as customer orders and employee performance. Moreover, having reliable records is essential for legal protection. They provide necessary documentation if you need to take legal action or defend against claims. Accurate records are also vital for tax purposes, as they can protect you from fines during an audit and will streamline tax filing.

Neglecting to maintain the statutory registers and records mandated may lead to financial and legal consequences, including penalties for the company or its directors.

If you are seeking investment for your company or preparing it for sale, having well-organised statutory company books is crucial. Potential investors or buyers will want assurance that the registers accurately represent the company's status at that time, and you may need to provide a warranty confirming that the statutory records are current and properly maintained. Therefore, it is advisable to ensure that your statutory company books are well-organised from the outset. Even if your company has been established for several years, it is never too late to adopt good practices and keeping your company’s records accurate and current is vital for success. It enables better decision-making, legal protection, and proper documentation of financial transactions, all of which can lead to long-term benefits.



ID 153315033 © Larichev89 | Dreamstime.com