What is a source document?
- By Book Keeping Pros
- Sources checked 15 Oct 2026
Definition
A source document is the original record of a business transaction, such as a customer invoice, a bill from a supplier, a purchase receipt or a bank statement. It shows the date and amount of the transaction and what it was for. Entries in the books are made from source documents and can be traced back to them.
Source documents are the starting point of the audit trail, and the link runs both ways. From a line in the ledger you should be able to find the document behind it, and from any document you should be able to find where it was entered. An entry with nothing behind it is the hardest kind to explain to anyone checking the books later.
Some source documents a business creates itself, such as the invoices and receipts it issues and the credit notes it gives for refunds. Others come from outside: supplier bills, receipts for purchases, delivery dockets, and bank and card statements. Giving each one a reference that also appears in its entry, such as an invoice number, and filing them so they can be found by date, customer or supplier, keeps the trail easy to follow.
When something in the books does not look right, the source documents are where the checking starts. An unexplained item in a bank reconciliation, or a supplier's statement that disagrees with what the books say is owed, is usually settled by going back to what was actually agreed, supplied and paid.
In Australia
In its description of financial record keeping, Business Queensland lists source documents, on paper or in electronic form, showing when each transaction happened and for how much, as one kind of business record. It lists them alongside contracts and other legal documents, and private details about customers and the business.
For companies, the Corporations Act 2001 counts many common source documents as financial records: its definition in section 9 includes invoices, receipts, cheques and vouchers. Section 286 requires a company to keep written financial records that correctly record and explain its transactions, financial position and performance.
Worked example
| Date | Entry | Amount (AUD) | Source document |
|---|---|---|---|
| 2 Jun 2026 | Sale to a customer on credit | 1,320.00 | Sales invoice INV-0412 |
| 5 Jun 2026 | Stationery bought with the business card | 64.80 | Supplier receipt |
| 9 Jun 2026 | Stock bought from a wholesaler | 2,450.00 | Supplier bill and delivery docket |
| 30 Jun 2026 | Monthly bank fee | 15.00 | Bank statement |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Entering a transaction with nothing behind it and meaning to find the paperwork later.
- Filing documents with no reference that links each one to its entry, so tracing an entry back takes far longer than it should.
- Changing or reversing an entry without a document, such as a credit note or a corrected bill, that explains why.
- Keeping documents for some kinds of transaction, such as purchases, but not for others, such as refunds or bank fees.
Related terms
Related service
Small business bookkeeping
Your books kept current, every month.
Sources
- Financial record keeping
Business Queensland. Current at 27 February 2024, released 27 February 2024. Checked 16 October 2026.
© The State of Queensland, Business Queensland, licensed under CC BY 4.0 Licence: CC BY 4.0.
- Corporations Act 2001, sections 9 and 286
Federal Register of Legislation, Office of Parliamentary Counsel. Compilation No. 149, 19 September 2026, released 19 September 2026. Checked 15 October 2026.
Based on content from the Federal Register of Legislation at 15 October 2026. For the latest information on Australian Government legislation please go to https://www.legislation.gov.au. Licence: CC BY 4.0.