Set up a record-keeping system for a small company

What you are actually setting up

Most small companies do not have a record-keeping problem. They have a retrieval problem. The documents exist — in an email thread, on a director's laptop, inside the accountant's portal — but nobody can produce the register of members or a signed contractor agreement in under five minutes.

The fix is not a new app. It is three decisions:

1. A folder structure built around how you will search, not around where a document happened to arrive.
2. One naming convention applied to every file, without exceptions.
3. A named person responsible for each record area.

Everything else — which accounting package you use, whether receipts get scanned, how often you back up — sits downstream of those three. This guide gives you the framework for making them, and points you to the official sources that define what records your company must actually keep.

Read the rules before you design the folders

Start with the ATO's overview of record-keeping rules for business. The ATO frames its guidance around five record-keeping rules and includes a separate section on who is accountable for business records and what to expect if those obligations are not met. The ATO's own summary of the task is that you should understand what records are needed for your business and make accurate and complete record-keeping part of your daily business activities (ATO).

Then use the free ATO tool referenced by business.gov.au, which checks which records your business needs to keep and how well you are keeping them. Treat that output as your inventory. Build folders for the records it tells you apply to you, rather than copying a generic template.

Keep three streams separate

As a practical structure — not a legal list — separate your records into three top-level streams, because they have different owners, different audiences and different retention periods.

• Company and ASIC records: registration documents, constitution or replaceable rules, company registers, ASIC correspondence and lodgements, director and shareholder changes, annual statements.
• Financial and tax records: the records that support your BAS, GST and income tax positions — invoices issued and received, receipts, bank statements, payroll and superannuation records.
• Operational and contract records: leases, supplier and client agreements, insurance policies, licences, employee files.

Mixing these is the usual reason a company cannot find things. A share transfer filed next to a utility bill has no logical home later, and the person who needs one rarely needs the other.

Folder structure: function first, then year

Number the top-level branches so they sort in a stable order, and stop at two or three levels of depth. Deeper trees get abandoned.

• 00_Company_and_ASIC
• 01_Registration_and_constitution
• 02_Registers_members_directors
• 03_ASIC_correspondence
• 04_Director_and_shareholder_changes
• 10_Financial_records
• 11_Invoices_issued
• 12_Invoices_received
• 13_Bank_statements
• 14_Payroll_and_super
• 15_BAS_and_tax
• 20_Contracts_and_operations
• 21_Agreements_and_leases
• 22_Insurance
• 23_Employees
• 90_Archive
• Archive_2024-25

Two details matter more than the exact labels. First, file by function and then by year inside it, not the reverse — you search for "the 2025 insurance policy", not for "everything that happened in 2025". Second, keep one clearly named archive branch so old material stops competing with current material.

One naming convention, written down

Pick a single pattern and record it in a one-page file stored in 00_Company_and_ASIC. ISO dates sort correctly, which is the main reason to use them.

YYYY-MM-DD_Type_Counterparty_Reference_v01.pdf

Keep the type vocabulary in the same one-page file, and add to it deliberately. If two people write Receipt and Recpt, your search stops working — that is the whole failure mode this prevents.

Digital first, but keep a hard-copy path

The ATO recommends businesses use digital record keeping where possible, noting it makes some tasks easier and saves time once a system is set up, and that the ATO is moving towards digital records (business.gov.au). Business Queensland makes the same recommendation and adds the condition that matters for your design: if you use an electronic record-keeping system, you must be able to produce a hard copy of a record if the ATO or ASIC request it.

So build for both. Store digitally, but make sure every branch has a working export or print path and that a second person knows how to use it. The ATO also notes you need to show your records if they ask for them — retrieval speed is part of compliance, not a convenience.

Practical interpretation, not a rule from the sources: keep two copies in different places, at least one offsite or in the cloud, and test a restore each quarter rather than assuming the backup works. Also review who has access when someone leaves the company.

Assign one owner per branch

The ATO's guidance covers accountability for business record keeping. Translate that into the smallest workable allocation:

• One named owner per top-level branch, and one named backup per branch.
• A rule that documents land in the system within a fixed number of business days, not in an inbox.
• A monthly close of about 30 minutes: rename stray files, file receipts, confirm registers reflect recent changes.
• A quarterly check: restore test, access review, remove departed staff.
• An annual check: retention review and disposal, plus a re-read of the ATO overview page in case requirements have changed.

Retention and disposal

Two facts to work from, both from official sources. The ATO states that ASIC requires companies to keep records for seven years. For most other records, the ATO's overview page sets out the relevant retention period — check the current figure there rather than relying on a remembered number, because periods and requirements can change.

On disposal, keep a simple log: what was destroyed, when, and who authorised it. Do not dispose of anything connected to a dispute, audit, review or open query, regardless of whether the retention period has passed.

Why this is worth the hour

Poor record keeping can damage your reputation and result in fines, and good record keeping is described as more than a legal requirement (National Training). The practical cost shows up earlier than that: slow answers to your accountant, re-requested documents, and a director change recorded in an email rather than a register.

Common failure modes to design against, as practical interpretation:

• Filing by year only, so nothing is findable by subject.
• Treating email as the filing system.
• One person holding every password and every file.
• Updating registers once a year instead of when things change.
• Scanning documents without renaming them, producing scan_001.pdf collections.

Your next steps

1. Run the ATO record-keeping tool linked from business.gov.au and list the records it says apply to you.
2. Read the ATO overview page, including the section on accountability, and note the retention periods it specifies.
3. Draw your top-level branches on paper before creating folders.
4. Write the one-page naming convention and type vocabulary, and store it in your company branch.
5. Name an owner and a backup for each branch.
6. Migrate the current financial year first; move older material into 90_Archive in bulk and clean it later if you need to.
7. Put the monthly close in the calendar as a recurring appointment.
8. Re-check the ATO and Business Queensland pages annually.

General information only

This article is general information about organising records, not legal, tax, accounting or financial advice, and it does not account for your company's circumstances. Retention periods and record-keeping obligations can change, and what applies to your company depends on facts not covered here. Verify requirements with the ATO and ASIC directly, and speak to your accountant, registered tax agent or solicitor about your obligations. Australian Ltd is a publisher of general information; it is not a lender, broker, government body, regulator or comparison service.

If you are tidying records because you are preparing documents for a loan application, our home loans guide at /money/home-loans/ covers the next stage of that process.