What is documentation
In the context of accounting, ‘documentation’ refers to the supportive evidence that substantiates the transactions recorded in a company’s financial ledgers.
Key forms of such documentation typically include receipts, invoices, and contractual agreements, serving as tangible proof that the transactions not only transpired but are accurately reflected in terms of value.
What are the requirements for documentation in accounting?
Within the realm of accounting best practices, certain criteria must be met for documentation to be deemed satisfactory. The requirements for credible record-keeping under accounting standards are outlined below:
- Identification information for the purchaser, including name, address, and Australian Business Number (ABN).
- Details of the seller or service provider, including name and ABN.
- If the business is a company (Pty Ltd, Limited, etc.), the Australian Company Number (ACN) should be included.
- When applicable, the notation ‘GST registered’ should accompany the seller’s details.
- A unique invoice number.
- The date the invoice was issued.
- A clear description of the goods or services provided, along with quantities.
- The price charged for the goods or services.
- The place and date of delivery for the goods or services.
- The applicable Goods and Services Tax (GST) rate and the total GST charged if the seller is registered for GST.
- The payment due date.
This information pertains to what is known as primary documentation, directly linked to individual transactions in the accounts. In addition to this, secondary documentation, like supplier contracts, customer agreements, and corporate records, also forms part of a robust accounting record system.
Validity of digital invoices
Creating an invoice through an accredited invoicing software platform ensures the production of valid documentation. Such systems automatically assign a sequential number to each invoice and include requisite company information.
Create free invoices with Conta
Got a business in Australia? Start making invoices and track your revenue with Conta, right now, for free!
It’s easy to create invoices with Conta. The web-based interface works just as well on your mobile device as your desktop or laptop computer, and you’ll be creating your first invoice within two minutes of creating your user account.
Sign up for free