Poor and inadequate record keeping are often recognised as a major problem for Self Managed Super Funds (SMSF).
One responsibility of being a trustee of a SMSF is to keep proper and accurate tax and super records.
It is important to keep updated records so that they can be made available to the fund's auditor when they audit the fund each year. Accurate records must also be provided when requested by the ATO.
The following records must be kept for a minimum of five years:
- Accurate and accessible accounting records that explain the transactions and financial position of the SMSF
- An annual operating statement and an annual statement of the SMSF's financial position
- Copies of all the SMSF annual returns lodged
The following records must be kept for a minimum of ten years:
- Records of all changes of trustees
- Trustee declarations recognising the obligations and responsibilities for any trustee, or directors of a corporate trustee, appointed after 30 June 2007
- Members written consent to be appointed as trustees
- Copies of all reports given to members
- Documented decisions about storage of collectables and personal-use assets
- Minutes of trustee meetings and decisions, if matters affecting the fund were discussed
It is also important to take minutes of all investment decisions, including why a particular investment was chosen and whether all trustees agreed with this decision.
This is important because if an individual invests the SMSF's money in an investment that fails, the other trustees are able to take action against the individual for failing to be diligent in their duties.
However, if the investment decision was recorded in the meeting minutes that were signed by the other trustees, there will be evidence on record that all trustees were in support of the decision.
If you have a SMSF and would like to make record keeping easier, Butlers Accountants is recommending Cloud based accounting solution Xero. Cashbook packages start from as little as $10 per month. This is a great way to keep your records electronically by scanning paper files and attaching in your xero file. If you would like more information on setting up your SMSF on Xero please contact our office on 5536 2288.