Bookkeeping can be time consuming, and let’s be honest, you would rather spend that time working in your business to generate income than bookkeeping (or paying unnecessary bookkeeping fees) if you had a choice.
So what can you do to simplify this process?
- Get Bookkeeping Software
- Open a business account for business earnings and expenses. Keeping business & personal expenses separate
- Regularly enter transactions
- Reconcile bank accounts consistently
- Open a separate account for taxes and liabilities
- Get a bank statement with a month end cut off
- Keep good records – file & retain all receipts for expenses & paid bills
- Don’t over categorise
- Are you registered for GST? Make sure you are not claiming it incorrectly
- Get a Great Bookkeeper
Tip #1 – Bookkeeping software
Bookkeeping software. Purchase a product that is right for your business. Options include Payroll to record your staff leave entitlements and assist in the preparation of Payment Summaries at the end of the Financial year. This way you can enter all expenses paid, raise invoices, track if payments have been received, reconcile bank accounts. All within one package, so all your records are kept neat and tidy.
Tip #2 – Business Account
Business Account. Open a business account to ensure all your income and expenses that relate to the business are separate from any personal expenses. This will save time with data entry and record keeping and reflect a true picture of your Business’ financial situation.
Tip #3 – Enter your transactions!
Regularly enter transactions. This will ensure your transactions are easy to remember for data entry purposes. Records are kept and filed in a system that is easy to find. Minimising time and frustration.
Tip #4 – Reconcile Bank Accounts
The more frequently you do this, the quicker it will be done and less over whelming it will feel. When you leave it too long between reconciliations, the transactions build up. You may not remember what each transaction relates to and will need to check your records.
Tip # 5 – Bank Account for Taxes and Liabilities
Open a separate bank account for your tax and superannuation liabilities. This way you will always have the funds available to ensure they are paid on time and will not accidentally spend the money on other things.
Tip #6 – Bank Statement with Month End Cut Off
If both your Bank Statement and MYOB file match with closing balances at the end of every month. This will make your bank reconciliation and tracking expenses much easier. It will also assist your accountant prepare end of month reports & end of financial year accounts
Tip #7 – Record Keeping
You must maintain good records, not only for the benefit of your business but also in the situation should an audit be requested. A healthy business should be tracked through its records on a regular basis, so you can recognise and correct any problems that may arise quickly & efficiently.
Tip #8 – Over Categorising
Don’t make things more complicated than they need to be. Try to merge accounts where possible. For example: Instead of separating printing & stationary, have these as one account. Ask yourself, does mobile phone expenses need to be separated from office telephone. How much information do you really need to show in your profit & loss reports? The more accounts you have, the easier it is for things to be coded incorrectly.
Tip #9 – GST
If you are registered for GST, make sure you are claiming everything you can legitimately, however are you aware that some items like water and council rates, registration, late fees, bank charges etc. are GST exclusive? Telephone bills may be split with part of the bill being GST inclusive and another portion exclusive. Always make sure whatever you have entered matches back to what is shown on your bill / receipt.
Tip #10 – Bookkeepers
Ensure you have a bookkeeper you can trust. One that knows what they are doing and where to find the answers should they have any questions. Some people claim to be bookkeepers, however in the long term, when your records arrive at the accountants, they have created more work than is necessary. Therefore, raising the costs of your work to be corrected before it can be completed.
Do you have complete trust in your bookkeeper? A friend who is charging you ‘mates rates’ to help you out may not be the right person for the job. Be confident that the job is done right the first time and get yourself a Great Bookkeeper.
If you have any doubts about your Bookkeeper and/or Bookkeeping for your business, come and have a chat to us. We can have a look at what is being done, advise if there are any issues that may be of concern and come back with a quote to assist you with your ongoing Bookkeeping needs. We offer services such as Payroll, Invoicing, Receipting, Reconciliation, Inventory & Reporting.
Good bookkeeping leads to good business management & growth