Melbourne Wealth Money
15-Oct-2020 By - team

Here are some bookkeeping tips for your small business

One of the most common reasons for the failure of new businesses to get off the ground is that they do not follow the standard procedures for bookkeeping in small businesses. Bookkeeping services are regarded for providing companies with an unbiased perspective on the activities taking place within their organisation. In the end, it might lead to the identification of chances to generate money while also avoiding difficulties with cash flow along the road.


Bookkeeping for small businesses might appear to be a daunting task to organisations that are just starting out. But the fact of the matter is that there are actions that proprietors of small businesses may take that, in the long term, can have a significant impact. The following are some of the most helpful suggestions for the bookkeeping needs of small businesses and other organisations of a similar size.

Basic Tips on Getting Bookkeeping Right
  1. Create a New Business Account.
  2. Set Budget Aside for Tax Purposes.
  3. Always Keep Your Records Organised.
  4. Track Your Expenses.
  5. Maintain Daily Records.
  6. Leave an Audit Trail.
  7. Stay on Top of Your Accounts Receivable.
  8. Keep Tax Deadlines in Mind.

Bookkeeping is something that you either have to learn or outsource when you're running a business. Luckily, it's possible to learn how to manage your own books and there are a few notable benefits to tackling it yourself.

Small-business bookkeeping requires you to choose between single- or double-entry accounting. Single-entry accounting records all of your transactions once, either as an expense or an income.

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If you’re in the process of launching a new company, now is the time to get a grasp on your financial records and accounting procedures. When your company is doing well and you have a steady flow of income, it will be advantageous to have a firm plan in place for the bookkeeping tasks you need to complete. As part of your responsibilities, you will need to check your invoices, document and keep track of any receipts, as well as maintain tabs on your revenue and expenditures.

Maintaining accurate financial records is essential to successfully operating any commercial enterprise, be it a single proprietorship, corporation, partnership, or trust. When you have skilled accounting that is up to date, you will be able to quickly handle your invoicing, cash-to-cash cycle, deposits, credit, and any of the other financial activities your company engages in on a daily basis. Therefore, maintaining a healthy financial position is one of the most important aspects of growing and running a successful business.

You’re in charge of your own company, right? Of course, it is impossible to emphasise how important it is to stay on top of your money; but a large number of owners of small businesses lack the financial understanding necessary to ensure that their accounting and bookkeeping procedures operate efficiently.


We’ve put together some accounting and bookkeeping advice for small businesses to help fuel their financial futures, and whether you’re a new student thinking about a career in finance or a small business owner looking to get a handle on your finances, we hope that this information will be helpful to you.

When it comes to having a clear picture of how well your company is doing, implementing solid bookkeeping practices will serve you well regardless of whether you already run an established company or are in the process of launching your very first small business. The role entails a number of responsibilities, including the handling of payroll and invoicing, as well as the monitoring of corporate income and expenditures. Therefore, what kinds of procedures should owners of small businesses put into place to ensure that everything stays in working order?

The majority of companies in Australia are classified as being classified as small firms. This is because small enterprises are an essential component of Australia’s economy, playing a vital role across a diverse range of sectors, geographic areas, and philosophical perspectives. As a direct result of this, the competition is quite strong. Therefore, it is essential to devote the bulk of your time to the expansion and improvement of your company. However, in order to accomplish this goal, it is necessary first to have the financial components of the company in order.

Always Stay Organised

Maintaining order is the most important piece of advice any company can take to heart. Make sure that your sales and purchases are accurately logged in your records. If you do it every day, there is no chance that you would forget anything. Make sure that you have all of the necessary papers each month. Maintaining order in one’s life may be made easier by making use of a folder that compartmentalises one’s monthly income and expenditures.

You need to be sure that you consider all of the many ways you were paid, including cash, checks, and even electronic transfers. In addition, for the costs, each item that is documented need to have its corresponding receipt. Finally, even if there is no receipt, there need to be some kind of notation indicating the total amount that was spent on a particular product or service. This ensures that it may be examined later in the event that there is a requirement to validate your reports to comply with tax regulations.

Due to the hectic nature of running a small business, it is possible that receipts may be misplaced in the glovebox of the ute or that the younglings would destroy financial paperwork. Unfortunately, both of these scenarios are possible. The good news is that there is software available that can help ease some of this tension. You just take a picture of the receipt, upload it to Receipt Bank (RB), and then the bill is delivered to the accounting software you use. This is one of the many useful features that Receipt Bank (RB) offers (ideally Xero or MYOB).

Separate business and personal

Do not wait until your company is booming before devoting the necessary time and effort to properly establishing its bank accounts. When things start to get hectic, it may be a real pain trying to juggle both personal and professional obligations at the same time. As a result, as soon as you launch your business, you ought to get started immediately opening bank accounts for it and channelling all of its financial dealings through those accounts. You will be able to quickly evaluate your cash flow as a result of this because it will be straightforward for you to compare your revenue to the amount of money that you have spent.

There are some owners of small businesses who merge their personal finances with those of their companies. If you own and run a company, you are obligated to open a separate bank account in the name of your enterprise. Both the credit rating of your organisation and your ability to keep accurate records of the financial transactions that take place within it will improve as a result of this action on your part.

As a new owner of a small business, one of the first things you should focus on doing is establishing a banking relationship for your firm as soon as possible. This is one of the most crucial pieces of advice regarding accounting. You will have a much easier time keeping track of your day-to-day revenues and expenditures if you make it a point to ensure that all of the financial transactions that pertain to your company are handled through the aforementioned accounts.

Once your company is up and running, it can be much more difficult to acquire a clear image of your financial data and cash flow in your accounting and accounts. This is especially true if you have a complicated corporate financial situation.

If you or your book-keeper conduct personal business while the company is open, you are squandering both your time and the resources available to the company. Imagine for a moment that the information regarding to your own personal finances and the information pertaining to the finances of the company become intertwined. If this is the case, the personal funds will need to be entered into the accounting programme and assigned to the appropriate draws. If you choose to have a bookkeeper take care of this for you, there is a chance that this will result in additional costs that are not required.

You should also consider opening a business savings account so that you may put money away from your company’s profits to use for satisfying your financial commitments to the government. You should also consider getting a company credit card if you haven’t already.


Prioritise your books

You have a million and one things to accomplish now that you are the owner of a new firm. It may be tempting to ignore your books in favour of concentrating on the day-to-day operations of your company, but it is in your best interest to give your books the highest priority. Put aside some time right from the start to stay on top of your paperwork, and you will be happy for it in the long run, particularly when it comes to filing your taxes. If you’re having trouble finding the time to keep up with your accounts, it could be useful to enlist the assistance of a bookkeeper who can do it for you.

The majority of effective bookkeeping and accounting software programmes make it simple for you to produce a broad variety of reports that may assist you in gaining a better understanding of how your company is operating. However, to derive any benefit from them, you will first need to comprehend the information they provide.

Investing some time in studying which bookkeeping reports are most beneficial for your company is one of the most important advice we can offer to small businesses regarding bookkeeping.

Your small firm should pay particular attention to the accounts receivable report as well as the balance sheet when it comes to the various accounting reports. So spend some time becoming acquainted with these concepts first, and then build on that foundation to expand your financial literacy.

Learn to do a bit of accounting yourself

When there are only a few employees working for the organisation, accounting can become quite expensive. Now, rather than paying an accountant to accomplish the task for you, why don’t you educate yourself on the fundamentals of accounting and do it yourself? When it comes to managing things like payroll dates and requirements like federal and state filing dates, you do not require the services of an accountant. You are able to complete these tasks on your own.

However, if the task requires calculating annual returns and ensuring that you are up to date with your taxes, you should, of course, let a professional accountant handle the work that is required of them. This is because professional accountants have the necessary training and experience to perform these tasks.

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Know Your Taxes

If you do your own taxes, you are probably already aware with the procedures involved and the necessary paperwork. However, bear in mind that the tax you pay as a corporation may be different from the tax you pay as an individual, with potentially different laws, restrictions, and deductions available to you. Therefore, it is essential to have a fundamental grasp of the tax regulations that a company must meet; thus, you should talk with a qualified tax return accountant to ensure that you are aware of all that must be done.

Although it might not sound all that interesting, one of the best bookkeeping ideas for small businesses is to spend some time familiarising yourself with the tax duties that are placed on them. You would be surprised at how many people who own small businesses, many of whom have been in operation for a significant amount of time, do not understand the tax requirements that apply to their businesses and how these requirements differ from individual income tax requirements.

Take the time to familiarise yourself with the fundamentals, such as the circumstances under which your small business will be required to register for the GST and the specifics of the reporting obligations for the BAS. That way, you may have the peace of mind that comes with knowing that you are adhering to the ATO’s regulations and guidelines.

In addition, it is not enough to just be aware of the potential tax burden you may face. Keeping detailed records of your income and expenditures, including those related to your business, will help you guarantee that you make the most of any tax deductions to which you are eligible.

Due to the fact that taxes for small businesses are calculated differently than taxes on income, it is imperative that you investigate your tax responsibilities and remain on top of them. When it comes time to compute your taxes, having records of your expenditures and costs will allow you to claim deductions.

It is essential that you have a solid understanding of the tax deductions to which you are entitled. Even if your Financial Advisor will be able to assist you with this matter, it is still in your best interest to be aware of the benefits that are rightfully yours.

Don’t confuse business with pleasure.

Cash flow is one of the most crucial components of running a business, and as a result, the process of maintaining your books should be treated as a significant and distinct part of your life. Be careful not to get your personal money mixed up with those of your enterprises, and don’t put off taking care of your company’s financial matters until the very last minute. Keep your personal bank accounts, and your company bank accounts separate at all times, and make sure that any and all business-related transactions go via the business account. If you want to avoid falling behind and wasting time attempting to catch up, keep track of your funds and papers a top priority.

Cashflow is King – Prepare Cash Flow Forecasting and KPIs

The burning issue of cash flow is one that is brought up over and again in conversations. We are unable to pay our debtors, our employees, or even ourselves if we do not have any cash on hand.

Our advice? Make a request to your accountant that he or she create a comprehensive financial study of your small business. You will be able to create objectives, align key performance indicators to achieve growth, and ensure that you have sufficient cash to satisfy your responsibilities if you track and understand your spending.

Superannuation – Pay It On Time

If you are late with your superannuation payments, you will lose the ability to deduct those payments from your taxes, and you might be subject to the Super Guarantee Charge (SGC). In addition to the initial sum that is due but has not been paid, there may be further penalties in the form of fines, fees, or interest. Whether you use a Government Superannuation fund or a Self Managed Superannuation Fund, you are required to make the payment of your superannuation obligations a higher priority than the payment of any other debts, including bank overdrafts, small loans, or any other debt that allows for some leeway in terms of repayment (within reason, of course).

Invest In Cloud Accounting Software

The QuickBooks programme will make it much simpler to get a hold of your financial records. You may keep track of your financial situation at any moment by downloading the app and using it. You will also adore the capability that allows you to collect receipts, which will allow you to get rid of the shoebox full of receipts that has been hiding beneath your bed. You may also use QuickBooks to manage your goods and services tax (GST), submit your business activity statement (BAS), and generate rapid reports on your company’s financial situation, saving you time and money.

Software for Accounting and Bookkeeping Selection

Those trying to keep track of their small companies’ bookkeeping may find that investing in accounting software may make a world of difference. It is in your best interest to give careful consideration to the many different choices that are open to you. MYOB, Xero, Reckon, and Quickbooks are some of the most well-known business accounting software products, but there are many more available.

Cloud-based or online accounting software is becoming increasingly popular among owners of small businesses since it enables users to view and work on their data from any location in the world with an internet connection. It also implies that your bookkeeper and accountant may work on files remotely and at the same time.

It is also essential to keep in mind that the majority of accounting and bookkeeping services concentrate on offering only one or two distinct types of package options. Therefore, if you are looking for advice regarding which accounting software would be the greatest fit for your requirements, it is recommended that you look for experts that work with a variety of different packages. This will guarantee that you receive the most precise information that is available to you.

It is essential that you keep in mind that you may be able to deduct the cost of your monthly software subscription as a valid business expense; this is something else to keep in mind.

Ensure you are paid correctly

The process of billing customers is one of the most critical aspects of running a company. How are you going to keep your business afloat if your customers aren’t paying you? You need an effective method of invoicing and a mechanism to maintain track of what has been handed in to guarantee that payments will be made. This may be accomplished with billing software; however, you can also achieve this by manually entering the data into a spreadsheet and locating free invoice templates online.


Use Digital Tools for Payroll

When it comes to tracking the number of hours their employees have put in, a significant portion of business owners continue to rely on paper records. This presents a number of challenges. Today, users have access to a plethora of different software options. There are even free timesheets that managers of local businesses and owners of businesses may use to better organise their operations. The information the programme has gathered may then be uploaded to the accounting software. It helps business owners and managers save hours of time that would otherwise be spent on laborious tasks.

Small businesses don’t need enterprise-level software.

If you only have a few people working for you, there is no reason to invest a lot of money on accounting software. For instance, you are quite capable of handling your own payroll. Figure out how to utilise Excel to keep tabs on employees’ compensation and create schedules for it. Spending money on software you don’t require may build up to a significant price, regardless of whether it’s a recurring payment or a one-time purchase.

When considering the software you need to buy, it is essential to investigate cloud-based platforms first. These services guarantee that your financial information is available on the road, enabling you to check budgets, handle payroll, and do a variety of other financial tasks. In addition, using cloud-based solutions ensures secure backups and increased security, both of which are crucial for modern enterprises.

If you are taking accounting and bookkeeping classes, you should keep track of your personal funds to save money on accounting software. On the other hand, if you don’t feel like taking classes, you should look into hiring a freelance accountant. An unskilled eye may make a lot of minor financial mistakes that will add up to a pricey sum, thus, another option is to invest in software. An untrained eye can make lots of little financial blunders.

Recognise When To Hire Professional Bookkeepers

As the owner of a small business, each day brings a whole new set of challenges and responsibilities for you to tackle. Don’t put so much pressure on yourself since as your business grows, it’s possible that you won’t have the ability to devote enough time to your bookkeeping to stay on top of it. One more of the most important pieces of guidance that we can offer in terms of accounting for small businesses is to be aware of the times when it is necessary to seek the services of a professional.

Your company can benefit from a qualified bookkeeper in a variety of different ways. For example, keeping correct financial records will not only make it simpler for your company to remain compliant with ATO standards, such as BAS reporting, but it will also make it easier for you to receive helpful advice from your accountant.

Make Time for Family and Yourself – Don’t Get Lost in the Accounting Madness.

Because, after all, what prompted you to enter this field in the first place? It’s crucial to be happy in life, and if you make the required adjustments to enhance the accounting functioning of the company, you’ll definitely have more time for the people you care about, including yourself, which will help you achieve that happiness. Putting money into an accountant you have complete faith in is a prudent choice.

Follow the advice given in accounting advice for small businesses. You will be well on your way to achieving all of your small business goals and, ultimately, growing your company to the point where it can reach its full potential.




Guest post by : team Form -

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