Many business owners take on their own bookkeeping services, sometimes in a planned approach, but often it just happens! When you start a business, often it’s the founder’s partner or a parent that gets the unenviable task of becoming the accidental accountant!
Whilst we always recommend that businesses seek professional help, training and engage local bookkeepers and BAS Agents to ensure they maintain compliant; opportunities exist for business owners to undertake their own basic bookkeeping. We present below our 10 tips on how they can stay on the right side of the ledger!
1. Use technology – Automate as much as possible.
With the onset of cloud-based accounting systems such as Xero, MYOB and QBO; it has never been easier to undertake your own bookkeeping. However, the real key is to engage a professional to help with the set up and have them implement and utilise as much of the systems automation and tech as possible. Data entry is so old school.
2. Separate business and personal finances
A lot of businesses start life funded by their owner. As a result, we often see personal expenses and banking mixed up with business expenses and banking. For example. the use of personal credit cards for business use. This is one of the most common causes of frustration in small business bookkeeping. It may not appear so at first, but as time goes on you will regret it!
3. Ask for help and upskill
Don’t be afraid to ask for help. Many small business bookkeepers will be happy to assist on an adhoc basis where your home-grown skills have tapped out. But be sure to listen to their advice, it may involve some initial pain and change, but will provide years of improved efficiency and clarity.
Of course, you can always look to formalise your own skills and undertake a Cert IV in Accounting & Bookkeeping from a provider such as www.aift.edu.au.
4. It’s all in the cadence – perform regular financial checkups.
Irrespective of your business structure, Sole Trader, partnership, or Company, it is critical to have a regular cadence in your bookkeeping work. Go over your books at least weekly to make sure everything is up to date.
5. Don’t do your accounts just for the ATO!
If your primary reason to maintain your accounts is to meet the ATO compliance and preparing tax returns, then you have missed the point. At the end of each quarter, take a deep dive into your financial records and be sure not to overlook your balance sheet. Look for trends such as declining sales, declining cashflows, increasing Accounts receivables to name a few. Talk to your accountant who will be able to keep you on track.
6. Keep your Tax documents.
Attached to our item no.1. Tax legislation requires that tax related documents are required to be retained (i.e. Tax Invoices issued or received). Accounting programs such as Hubdoc and Dext can make this process simple, with phot/OCR technology your invoices can be stored and categorised, as well as pushed direct to your Accounting system, straight from your mobile or email.
7. Monitor your employees’ hours with time tracking software.
Cloud-based time tracking software allows employees to clock in and out on their smartphones, tablets or computers. But it doesn’t just save them hassles—it also makes your life easier by automatically tracking overtime, PTO, etc. You can find time tracking software designed for just about any industry. Choose one that works with your bookkeeping software, and payroll will be a snap, too.
8. Cashflow is king! Accounts receivable is the Queen.
Your accounts Receivables represent credit that has been extended to your customers. Think of it as cash you had loaned to your customers. It’s not only struggling companies that have cashflow challenges, growth is a cash hungry beast! Check and follow up on this report at least weekly.
9. Compliance Calendar
Death, taxes and compliance….all are inevitable! Avoid missing deadlines by registering with relevant legislative authorities like the Australian Taxation Office (ATO) to ensure you stay up to date with ‘due dates’. Setup a forward calendar in a program like Outlook with reminders and warnings of due dates.
Obviously, most compliance lodgements involve a payment, so set aside money for any anticipated tax bills and pay on time so you don’t face fines.
10. Get help!
There are many sources of help available, from Bookkeepers, BAS Agents, Accountants and business Coaches and Mentors. These full time professionals have been working in their field and are experts in small business bookkeeping and accounting, and also have an network of specialist advisors
If you are looking for bookkeeping services Gold Coast or bookkeeping Services Sunshine Coast or anywhere across South East Queensland, check out our website at www.yourfinancedept.com.au or submit a query to helpme@yourfinancedept.com.au.
