In bookkeeping, compliance refers to meeting all legal and regulatory requirements for financial record keeping, tax reporting and lodgement obligations set by your tax authority.
Financial compliance encompasses all the rules and regulations your business must follow regarding record keeping, tax reporting and financial disclosures. Every country has specific compliance requirements set by its tax authority - the ATO in Australia, HMRC in the UK, IRS in the US, and so on. Core compliance obligations include maintaining accurate financial records, lodging tax returns on time, paying taxes when due, keeping records for the required retention period and providing information to authorities when requested. Non-compliance can result in penalties, interest charges, audits and in serious cases, criminal prosecution. For small businesses, the most common compliance areas are GST/VAT returns, income tax returns, payroll tax obligations and record keeping requirements. SortBooks helps maintain compliance by automating transaction categorisation with correct tax codes, tracking deadlines, generating compliant reports and maintaining a complete digital audit trail in Xero.
SortBooks automates the bookkeeping processes related to compliance by connecting to your Xero account and using AI to categorise transactions, reconcile bank feeds and generate accurate reports. Instead of manually managing compliance, SortBooks handles it automatically with 97%+ accuracy - saving you hours every week and ensuring your books are always up to date and compliant.
Tax compliance means meeting all your obligations to file tax returns, make payments and maintain records as required by your country's tax laws and tax authority.
The BAS is an Australian tax form used to report GST, PAYG withholding, PAYG instalments and other tax obligations to the ATO, typically lodged quarterly.
VAT is a consumption tax charged on goods and services at each stage of production and distribution. Businesses collect VAT on sales and reclaim VAT on purchases, remitting the net amount.
GST is a broad-based consumption tax applied to most goods and services. Businesses collect GST on sales and claim credits for GST paid on purchases, remitting the net amount to the tax authority.
An audit trail is a chronological record of all financial transactions and changes made in your accounting system. It provides a verifiable history that supports the integrity of your financial data.
SortBooks handles all the complexity automatically. Just connect Xero and let AI manage your books.