Proper record keeping is not optional - it is a legal requirement for every business. Your tax authority requires you to keep records of all business transactions, and the records must be in English (or translatable), verifiable and retained for the required period. Good records protect you in an audit, help you claim all entitled deductions and make financial management much easier.
Understand the minimum record retention period in your country (typically 5-7 years)
Keep records of all income - invoices, receipts, bank statements
Keep records of all expenses - receipts, bills, credit card statements
Maintain records of all assets - purchase price, depreciation, disposal
Keep payroll records including pay slips, tax withholding and super/pension
Store records securely - digital records are acceptable in most countries
Back up digital records regularly
Organise records so they can be produced quickly if requested by the tax authority
Businesses in Hong Kong operating under the Profits Tax system must meet these compliance requirements set by IRD:
Throwing out records before the retention period expires
Not keeping receipts for small cash purchases
Relying solely on bank statements without supporting documents
Not backing up digital records
Mixing personal and business records in the same filing system
Not keeping records of assets and their depreciation history
SortBooks connects to your Xero account and handles Profits Tax compliance automatically. Every transaction is categorised with the correct tax treatment, bank feeds are reconciled in real-time and your IRD-ready reports are always up to date. No more last-minute scrambles or manual data entry.
Every transaction gets the correct Profits Tax code automatically - 97%+ accuracy from day one.
Generate compliant reports for IRD at any time - no reconciliation needed.
Never miss a filing deadline. SortBooks tracks your obligations and reminds you in advance.
Requirements vary: Australia 5 years from the date you lodge your tax return. UK 6 years (5 years after 31 January filing deadline). US generally 3 years (6 years if underreporting). Canada 6 years. Most countries recommend keeping records longer if there are complex transactions.
Yes. Most tax authorities accept digital records provided they are legible, complete, backed up and can be produced in a readable format. SortBooks and Xero together provide a fully digital, cloud-based record keeping solution.
SortBooks automatically maintains a complete digital record of every categorised transaction in Xero. Bank feeds, categorisation decisions, reconciliation records and tax reports are all stored securely in the cloud - meeting record keeping requirements in all major jurisdictions.
Join thousands of Hong Kong businesses using AI to handle their bookkeeping and tax compliance.