A source document is the documentation of a transaction (or posting) in the accounting. Usually, a voucher is a receipt or an invoice.
All transactions recorded in the accounting must be linked to a source document, and vice versa. Source documents should be traceable back to transactions, and modern accounting systems usually have methods for scanning and storing vouchers to ensure this.
What are the requirements for source documents?
To ensure the validity of source documents, it is imperative to adhere to specific requirements. According to legal mandates, business records must be maintained for a minimum of five years. The essential components that must be included in these documents are:
- Seller’s identity: Indicate your identity as the seller, incorporating your business name or trading name. While contact details are optional, it is advisable to include them for comprehensive information.
- Australian business number (ABN): Include your unique ABN to establish your business’s official identification.
- Invoice issuance date: Specify the date on which the invoice was issued to maintain a chronological record.
- Itemized list: Provide a succinct list of the items sold, detailing the quantity and corresponding prices for transparency.
- GST amount payable: Clearly state the goods and services tax (GST) amount payable, if applicable. For clarity, display the GST amount for each item separately. Alternatively, if the GST amount constitutes exactly one-eleventh of the total price, you may opt for a statement such as ‘Total price includes GST.’
- GST inclusion: Fulfill the requirement related to the extent of GST inclusion for each item sold. This can be achieved by either displaying the GST amount for each item or explicitly stating that the total price encompasses GST.
It is possible and legal to store vouchers physically, but the safest and most practical way nowadays is to keep the vouchers electronically. If it is not clear on, for example, a receipt why the voucher is related to the company’s operations, you must write a brief explanation together with the voucher and sign it, with the date, before scanning or storing the receipt in another way.