Basic Bookkeeping Tips
Every business by law is required to keep accurate and up to date records of their business accounts. The importance of organizing your accounts and systems from the onset of your business start-up is vital and often overlooked. The reality is however, bookkeeping is often one of the most neglected areas of one’s business. Either due to time constraints, lack of knowledge or just one of those jobs that no-one ever really wants to do, many businesses fall way below the mark when it comes to keeping their records up to date and accurate in a way that complies with the ATO’s standards.
Here are some basic bookkeeping tips to help you with you getting your business bookkeeping off to a solid start.
- Get a great bookkeeper to do your books
This would be the ideal, as hiring a bookkeeper enables you focus on growing your business while ensuring your record keeping is up to date. Bookkeepers are also up to date with the latest tax compliance requirements and better still, the expense of hiring the bookkeeper is a tax deduction for your business.
- Open a separate bank account for your business earnings and expenses.
It is important to keep your private transactions separate from your business transactions. This reduces the likelihood of errors and can save you a lot of time and confusion.
- Get an accounting software system that suits your business needs.
With GST and tax compliance becoming more and more rigid by the ATO, paper bookkeeping is no longer an efficient or trustworthy method of bookkeeping for any business. Many options are now available on offer more than ever and many with the convenience of online access and cloud back up. The accounting software you choose should be determined by the nature of your business, (ie: retail, manufacturing, professional) and the size of your business (sole trader or employees).
- Always keep your receipts.
By law, any purchase greater than $75 must be substantiated with a receipt if it is to be claimed as an expense to the business. Receipts and accounting records must be kept for a minimum of 5 years. Always keep copies of all your invoices for the sales that made in the business, all invoices for purchases that you have made in the business as well as employee wages payments, superannuation, BAS returns, tax returns, bank and credit card statements and anything else that basically has a dollar sign on it. Read this news and more updates.
- Get your tax and GST compliance and obligations right.
This is where knowledge is everything and if you are not up to date with the latest changes and requirements, it can cause major headaches and heart ache later on. Every business needs and ABN, and if your business is going to earn more than $75 000 per year, you will need to register for GST and submit a quarterly BAS. If you have staff, you need to register for PAYG withholding tax and submit the tax and return each quarter.
- Allocate time each week to devote to your business’ bookkeeping.
After reading all of the above and if you still don’t think you need a bookkeeper, then it is essential that you devote some time each week to keep your books up to date. Bookkeeping and keeping your records up to date is one of those things that can quickly snow ball, so keep on top of it and keep yourself educated. Working on your business’ accounts regularly will also enable you to keep a pulse on your business and to regularly review and track your progress and control your cash flow. Visit http://www.northbaybusinessjournal.com/northbay/sonomacounty/4046645-181/sonoma-county-business-boosters-share#zEqt5pZyQKDs4wzy.97