Introduction
Effective record-keeping is the backbone of every successful business. Whether you’re a startup, SME, multinational corporation, or non-profit organization in Pakistan, maintaining well-organized, accurate, and timely business records is not only good practice—it is a legal obligation under various regulatory frameworks, including the Companies Act, 2017, Income Tax Ordinance, 2001, and Sales Tax laws.
In this guide, we’ll walk you through the best practices for business record-keeping in Pakistan, covering regulatory requirements, document types, retention timelines, digital record trends, and tips to stay compliant and audit-ready.
1. Why Record-Keeping Matters
A. Legal Compliance
Pakistani businesses are required by law to maintain certain records for tax, audit, and regulatory purposes. These include:
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Accounting records
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Tax returns and challans
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Employee payroll and contribution records
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Corporate resolutions and statutory registers
B. Financial Transparency and Audit Readiness
Accurate records help you:
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Track revenues, expenses, and profitability
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Prepare for tax audits or inspections
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Resolve disputes and avoid penalties
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Secure funding from investors and banks
C. Operational Efficiency
Good record-keeping allows for:
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Better decision-making
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Inventory and cash flow control
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Customer and supplier history tracking
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Timely compliance filing
2. Legal Requirements for Record-Keeping in Pakistan
A. Under Companies Act, 2017
Companies must maintain:
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Books of accounts at registered office
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Proper records of:
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Receipts and payments
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Sales and purchases
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Assets and liabilities
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Cost accounting records (if applicable)
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Failure to maintain records may result in penalties under Section 230.
B. Under Income Tax Ordinance, 2001
According to Section 174:
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All taxpayers must keep:
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Books of accounts
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Tax returns and assessments
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Sales invoices and receipts
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Bank statements and cash books
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Records must be retained for 6 years from the end of the relevant tax year.
C. Under Sales Tax Act, 1990
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Registered persons must retain:
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Sales tax invoices (STRN-based)
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Purchase records with supplier NTN/STRN
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Electronic records compatible with FBR’s POS or e-invoicing system
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Monthly returns and working papers
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Records must be preserved for 6 years as per Section 22.
3. Types of Records Businesses Should Maintain
| Record Type | Description |
|---|---|
| Financial Records | Journals, ledgers, trial balance, vouchers, reconciliations |
| Banking Records | Bank statements, deposit slips, cheque books |
| Sales & Purchase Invoices | B2B, B2C invoices with tax details, discounts, and terms |
| Payroll & HR Records | Salaries, EOBI, gratuity, income tax deductions (Form 16) |
| Taxation Documents | Income tax returns, notices, FBR correspondence, challans |
| Corporate Documents | MoA, AoA, Form A, Form 29, board resolutions |
| Inventory Records | Stock cards, delivery notes, purchase orders |
| Contracts & Agreements | Legal contracts with vendors, staff, banks, etc. |
| Asset Registers | Fixed asset schedules and depreciation details |
| Audit Reports | External and internal audit findings and responses |
4. Document Retention Periods in Pakistan
| Document Type | Minimum Retention Period |
|---|---|
| Accounting records (Companies Act) | 10 years |
| Tax records (FBR) | 6 years |
| Sales tax records | 6 years |
| EOBI & payroll records | 10 years |
| SECP filings (Form A/B, 29) | Permanently |
| Audit reports and working papers | 10 years |
| Contracts and legal agreements | 10 years or contract term |
5. Transition to Digital Record-Keeping
A. SECP and FBR Digitalization
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SECP eServices requires all statutory forms to be submitted digitally
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FBR’s IRIS and POS integration enable e-invoicing and online tax filing
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Electronic records are admissible under Qanun-e-Shahadat Order, 1984
B. Best Digital Practices
✅ Use cloud-based accounting software like QuickBooks, Xero, Wave
✅ Backup files weekly to secure cloud or offline drives
✅ Protect records with encryption and password security
✅ Maintain e-signatures and version control
✅ Organize folders by fiscal year and document type
6. Record-Keeping for SMEs and Startups
SMEs often overlook compliance due to resource constraints. To simplify:
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Use a basic accounting system (e.g., Excel, Zoho, or cloud apps)
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Hire a freelance bookkeeper or part-time accountant
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Set up recurring folders for tax returns, receipts, invoices, and payroll
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Maintain a compliance calendar for due dates (SECP, FBR, PRA, EOBI)
7. Record-Keeping for Online and E-Commerce Businesses
E-commerce entities should maintain:
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Online transaction records from platforms like Shopify, Daraz, WooCommerce
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Digital payment gateways: Easypaisa, JazzCash, Visa/MasterCard logs
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Sales tax e-invoices and POS integration with FBR
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Social media ad invoices for marketing cost justification
FBR expects digital sellers to declare income and retain proof of online earnings.
8. Record-Keeping for NGOs and Section 42 Companies
Section 42 (non-profit) companies must:
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Maintain detailed donor receipts and fund utilization reports
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Keep all compliance reports submitted to SECP and EAD
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Prepare and preserve annual accounts and audit reports
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File Form C, Form A, Form 29, and UBO declarations timely
Records must support transparency for:
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Auditors
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SECP
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Foreign donors
9. SECP & FBR Audit Preparation Through Record-Keeping
| Audit Type | Key Records Required |
|---|---|
| Tax Audit | Sales records, bank statements, expense logs, GL, invoices |
| SECP Inspection | Share register, Form A, resolutions, minutes, board meetings |
| Sales Tax Audit | Invoices, return working, purchase books, input/output tax records |
| WHT Audit | Tax challans, salary sheets, supplier payments with tax deductions |
Timely, accurate, and well-organized records reduce audit risks and compliance costs.
10. Tips to Improve Record-Keeping
✅ Separate business and personal transactions
✅ File physical and digital records in chronological order
✅ Reconcile cash, bank, and inventory monthly
✅ Use document naming conventions (e.g., “2025-04-SalesTaxInvoice-ClientABC”)
✅ Review with your accountant or tax consultant quarterly
✅ Conduct an internal records audit annually
11. Common Mistakes to Avoid
| Mistake | Risk/Consequence |
|---|---|
| Not maintaining original receipts | Disallowed tax claims |
| Incomplete shareholder register | Non-compliance with SECP |
| Missing salary or EOBI records | Legal action under labor laws |
| Delayed or lost tax challans | Fines and failed tax credits |
| Using non-compliant invoice formats | GST claims may be rejected by FBR |
12. Frequently Asked Questions (FAQs)
Q1: Are scanned records acceptable to SECP and FBR?
Yes, if properly maintained with secure digital signatures and accurate metadata.
Q2: Can I outsource record-keeping to a third party?
Yes, but ultimate responsibility remains with the company’s directors or owners.
Q3: What software is best for small business records?
Options include QuickBooks, Wave, Zoho Books, or even Excel templates if properly managed.
Q4: What if my company loses records due to fire or theft?
Notify SECP and FBR immediately, file an FIR, and attempt to reconstruct with available backups.
Q5: Do freelancers and small home-based businesses need records?
Yes, especially if they are registered with FBR, to support income declarations and expenses.
13. How Sterling.pk Can Help
At Sterling.pk, we help businesses establish efficient and compliant record-keeping systems:
✅ Setup of digital accounting software and templates
✅ Training for staff on bookkeeping practices
✅ Development of statutory registers and compliance folders
✅ Internal audit of existing records for FBR/SECP readiness
✅ Monthly, quarterly, and annual reporting packages
✅ Full accounting outsourcing for SMEs and startups
We ensure your business remains transparent, compliant, and audit-ready all year round.
Conclusion
Effective record-keeping is not just a regulatory requirement—it’s a strategic asset. In Pakistan’s evolving regulatory landscape, companies that maintain timely, accurate, and secure records are better positioned to grow, comply, and attract investors or funding.
Whether you are a startup founder, CFO, accountant, or nonprofit administrator, make record-keeping a priority. With tools, automation, and guidance from professionals like Sterling.pk, you can turn compliance into a competitive advantage.
