Record keeping for not-for-profits

Record keeping requirements

A good record keeping system will help you manage your tax obligations.

All organisations are required to keep accurate and complete records of all transactions relating to their tax and superannuation affairs. This includes not-for-profits.

Generally, for tax purposes, you must keep your records in an accessible form (either printed or electronic) for 5 years.

Basic records

Some of the basic records you may need to keep are:

• governing documents such as  
  • rules or articles of association
  • constitution
  • rule book
  • trust deed
• financial reports such as  
  • financial statements
  • annual budgets
  • reconciliations
  • audit reports
  • accounts payable and accounts receivable
• cash book records of daily receipts and payments
• tax invoices and income tax records, such as  
  • debtors and creditors lists
  • stocktake records
  • motor vehicle expenses
• records relating to employees such as  
  • TFN declarations
  • pay as you go (PAYG) withholding
  • superannuation
  • fringe benefits provided
• records of payments withheld from suppliers who do not quote an Australian business number (ABN)
• banking records such as  
  • bank statements
  • deposit books
  • cheque books
  • bank reconciliation
• grant documentation such as  
  • when funding will be received
  • when acquittals need to be made
  • application deadlines
• registration, certificates and accompanying documents to regulators such as  
  • ATO
  • Australian Charities and Not-for-profits Commission
  • state regulators
• contracts and agreements such as  
  • cleaning, maintenance and insurance contracts
  • finance or lease agreements
• copies of reviews of entitlement to tax concessions
• records to help prepare tax statements and returns.

For more information see:

• Manage your invoices, payments and records
• Statements and returns
• Not-for-Profit LawExternal Link – provides legal information and advice.

Mutuality principle – record keeping

Taxable not-for-profits applying the mutuality principle should keep appropriate records demonstrating the basis on which certain member contributions meet the principle.

Generally, your records should show:

• the contributions have been made by all members to a common fund for the benefit of members only
• how you have identified and apportioned the transactions that are for the benefit of both members and non-members.

Charities – record keeping

If your charity is registered with the Australian Charities and Not-for-profits Commission (ACNC), you must keep certain financial and operational records explaining your charity's position and activities. Your charity must keep these records for 7 years to meet ACNC record-keeping obligations.

For more information see ACNC Record information: keeping recordsExternal Link.

Deductible gift recipient (DGR) – record keeping

You must keep records that explain all transactions and other acts relevant to your organisation's status as a DGR. This requirement applies to both endorsed DGRs and listed by name DGRs.

The records must be in English or easily convertible to English and must be maintained for at least 5 years after the completion of the transactions or acts to which they relate. The penalty for not keeping proper records is 20 penalty units.

Your records must show that the following were used only for your principal DGR purpose:

• all gifts, and deductible contributions, of money or property made to it for that purpose
• money received because of such gifts or deductible contributions.

If your organisation is endorsed as a DGR, as a whole, or listed by name as a DGR, it must keep adequate accounting and other records.

If your organisation is endorsed as a DGR for the operation of a fund, authority or institution, maintaining a gift fund will show it has used its gifts and deductible contributions and their accretions for the principal purpose of its fund, authority or institution. Your gift fund records will need to substantiate this has happened.

If your organisation maintains one gift fund for two or more funds, authorities or institutions which it operates, the records must identify gifts and deductible contributions made in respect of each separate fund, authority or institution. You must also show how these gifts and contributions, as well as money received by the fund as a result of them, have been used to further the principal purpose of that fund, authority or institution.

You don't have to keep a record if:

• we notify you that your DGR does not need to keep the record
• your DGR is a company that has been finally dissolved.

For more information see Penalties for the current penalty unit amount.

Record keeping for GST

You must have a tax invoice to claim a GST credit for purchases that cost more than A$82.50 (including GST). If your purchase is for A$82.50 or less you still need to have some documentary evidence to support your GST credit claim.

Your supplier has 28 days to provide you with a tax invoice after you request one. Wait until you receive it before you claim the GST credit, even if this is in a later reporting period.

An invoice containing incorrect or incomplete information is not a valid tax invoice. You may be able to treat it as a tax invoice if it is missing information that can be obtained from other documents the supplier has given you. Alternatively, you can ask your supplier to replace it with a complete and correct tax invoice.

If a supplier does not quote its Australian business number (ABN) you may be required to withhold the top rate of tax from their payment and send the withheld amount to us.

For more information see:

• Recipient created tax invoices
• Valid tax invoices and GST credits
• Withholding from suppliers.

Reconstructing records

If your records have been damaged, destroyed or lost, you need to reconstruct your records to ensure you have accurately calculated your taxable income and comply with general record keeping requirements.

There are several ways we can help you reconstruct your records – for more information, see Reconstructing your tax records. Previous copies of your records may also be held by other parties such as your bank or registered tax agent.