As the end of 2025 approaches, the Australian Taxation Office (ATO) is tightening its focus on how businesses store and manage their financial records. For many business owners, this means more than just keeping receipts in a drawer, it’s about modernising systems and ensuring every transaction can be verified digitally.
What’s Changing?
The ATO has made it clear: digital record-keeping is no longer optional. From this year onward, the expectation is that every business, no matter the size, keeps accurate, accessible, and secure digital records for at least five years.
That includes:
- Invoices and receipts (digital copies accepted, physical not required)
- Bank statements, payroll summaries, and BAS reports
- Asset registers and depreciation schedules
- Proof of superannuation and tax payments.
While these requirements aren’t entirely new, the ATO is now enforcing them more consistently, particularly as part of its digital compliance and audit automation rollout. The introduction of tighter Single Touch Payroll (STP) Phase 2 reporting has already shown how closely data is now cross-checked across systems, and that trend is only accelerating.
Why It Matters for Your Businesses
Small and mid-sized businesses, especially in trades, hospitality, and professional services, are feeling the pressure to go digital. Many still rely on a mix of spreadsheets, email trails, and physical files. But that approach is now risky.
The ATO’s systems automatically flag inconsistencies between BAS, STP, and income declarations. Manual errors or outdated software can lead to unnecessary audits, penalties, or cash-flow disruptions.
We’re already seeing a spike in ATO review activity across Queensland, and it may not a matter of if you’ll be checked, but when.
The Practical Steps You Can Take Now
You don’t need to overhaul everything overnight. But a few smart moves will make a big difference:
- Use compliant accounting software.
Platforms like Xero, MYOB, and QuickBooks Online are already built to meet ATO standards. Make sure yours is up-to-date and linked to the right ABN and bank feeds. - Digitise your receipts and documents.
The ATO accepts digital copies, provided they’re legible and stored securely. Cloud-based storage or integrated receipt scanning apps (like Hubdoc) make this easy. - Review your payroll setup.
With STP Phase 2, all payroll data, including allowances, leave, and super is reported directly to the ATO. Check your payroll categories are correctly mapped. - Keep GST and BAS data consistent.
Ensure your GST reporting matches the transactions in your accounting system. Regular reconciliation reduces the chance of ATO queries. - Work with your accountant proactively.
Don’t wait for year-end. Make sure you have regular reviews so any compliance issues can be fixed early.
The Bigger Picture
This isn’t just about avoiding penalties. The ATO’s digital shift is part of a broader move toward a more transparent, data-driven business environment.
For well-organised businesses, that’s an advantage: better insights, faster reporting, and smoother access to finance or grants. Staying digitally compliant isn’t red tape, it’s smart business hygiene.
The ATO isn’t waiting for businesses to catch up. Now’s the time to make sure your systems are clean, connected, and compliant — so when the ATO comes knocking, you’re ready.
If you require assistance in setting up systems for digital record-keeping, reach out to your advisor, and we can talk you through some options.
