Source documents are those pieces of paper that pile up on your desk, in your wallet and possibly in your car. They cause you to stress when your accountant calls or at tax time. Although they can cause you a little inconvenience, they are critical to building your business. This is the information you will glean for reports and data you can use to run your business. They are legitimate expenses so you need them especially if they are paid with cash or from your “own pocket”.
They are called source documents because they are the source of the data for your accounting system to use. Source documents may be pieces of paper or a digital file sent to you. These include (but not limited to):
Supplier invoices / till slips
- The slips and invoices you receive when you pay for something.
Bank statements.
- The bank accounts:
- Into which the customer sends you money and where you pay money from.
- Savings or investment accounts in the company name.
- NB: There may be more than one, you need them all.
Petty cash.
- Any cash paid out and the documents recording this.
- Money in a cash box used for little items or sundry items, for example tea and coffee for the office, casual wages.
Salary information.
This is all the information that is used in the calculations of the salaries in a company. These include but are not limited to:
- Annual leave forms,
- Sick leave forms eg: doctors notes, etc.
- These are mostly statutory documents but essential
- Bottom line: it is any information entered into your payroll system in the salary calculation.
The source document is the first document in the chain in producing any reports or financial data of any trading entity. They are required to be kept for a minimum of 5 years. I suggest about 7 years.
Warning: some of these documents fade because of the paper they are printed on, therefore it is suggested that you convert them into digital format i.e. scanning and storing on your computer or on a memory stick. This is the way that any authority will require them to be submitted.
If you have any queries or questions, please contact us on bruce@bcas.co.za or on our website
This article was updated in October of 2022