Recording December Spending
December spending is always a juggle, but getting the documentation right now is key to a stress free tax time next year. As bookkeepers, our job is to ensure your files meet the ATO's rules so all the correct FBT and claim decisions are correct.
So what kind of details do you need you to record?
Staff Meals and Parties (The Entertainment Trap)
If you pay for food, drinks or celebration activities (like a team dinner or client lunch), the expense is classified as entertainment and the ATO requires specific information to assess it.
What we need you to record:
Who was there? Record the exact number of staff and the exact number of clients/others.
The cost per head Take the total bill and divide it by the number of people who attended.
This detail is absolutely crucial. Without the cost per person and the attendee split, it can be difficult to correctly assess if an FBT exemption might apply.
Client and Staff Gifts (Non-Entertainment)
If you purchase items like gift hampers, wine, flowersbor gift vouchers, these are generally treated as non-entertainment gifts and need a different level of detail.
What we need you to record:
Recipient and Value Clearly record who received the gift (e.g. staff member or client) and the full cost, including GST.
Is it a physical item or an experience? Make sure you categorize it correctly as a physical item (like a hamper) versus an experience (like tickets to a show).
Getting this level of detail logged into your bookkeeping files in December means no frantic searches or guesswork in June. It ensures your records are perfect and compliant with ATO substantiation rules from the start!
This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided in relation to your own circumstances.
