You have a lot on your plate as a business owner. Whether it’s the everyday operations of your company, client management, marketing strategies, networking, or keeping your company running smoothly, we can help. Finding time to develop accounting and bookkeeping charts, evaluate figures, and manage cash flow can be tough.
Tips for Long Term Success for Your Business
In fact, record keeping, financial management and compliance are critical to the long-term success of your business. Before you spend your days wrestling with spreadsheets, here are 12 record-keeping tips every business owner should know. If it’s complicated, talk to us. We’re pro accounting and bookkeeping and bookkeeping services Melbourne and we can help you get your business finances in order.
1. Need to separate personal and business Bank Account
Personal and business money may not seem like a big deal. However, every business should have a business account, separate from their personal bank account. In many cases, depending on your business structure, you will need a separate bank account for your business this separate account will allow you and your accounting and bookkeeping to easily allocate purchases and sales related to your business, saving you a lot of time, effort and headaches.
- Automation through cloud-based accounting and bookkeeping software
Cloud-based accounting and bookkeeping software allow you, as a business owner, to have access to information about your business at all times. Technology has allowed you to organize large amounts of documents, check spreadsheets, and perform calculations manually each month. Today, cloud-based software can do most of the work for you.
- Accounting and bookkeeping software can automatically send invoices to customers at the right time, track deposits and withdrawals, and generate cash flow reports. There are many software options. The right choice for you is one that will make your life easier. If you’re not sure, you can consult a professional accounting and bookkeeping for clear advice.
3. A user-friendly accounting and bookkeeping system
- Record and organize all transactions made by your business, so you can keep track of them and control your cash flow. Keeping all your business records, including invoices, receipts and expenses, will help you anticipate future business opportunities and ensure tax compliance in case of an audit.
- There are easy ways to scan paper receipts, but if you want to keep them, store them in a secure, locked cabinet and organize them in a simple system. It’s also a good idea to keep a backup of your records in case you lose them.
- Most cloud-based accounting and bookkeeping software will also allow you to store these documents. You can scan receipts with your cell phone or transfer electronic invoices directly into your electronic accounting and bookkeeping software for reconciliation and posting.
4. Follow-up calendar
No matter how careful you are with your accounts, a tax audit is always a possibility. You need to keep a paper trail of everything you buy and everything your customers pay for.
- An audit trail is essentially a set of documents that prove that the transactions recorded in your books are indeed genuine. If something goes wrong, such as an inaccurate audit or missing source documents or transactions, an audit trail will allow you to retrace your steps.
5. Understanding your business costs
When starting a business, it can be difficult to predict which costs you will incur and which will be tax-deductible. For example, business expenses related to your income are tax-deductible. However, items purchased solely for yourself may not be included in your accounts.
- If you have a mixed business and personal account, not all purchases are deductible. You will need to research and understand what you can claim under Australian tax law. If you are unsure which purchases are deductible, you should consult your tax advisor or local tax office.
6. Prepare regular reports
A good accounting and bookkeeping strategy are not only important for tax purposes. Keeping track of money coming in and going out makes regular financial audits easier. With the right accounting and bookkeeping software, you can ensure that all your customers pay their bills on time and that there are no gaps in your reports.
- In addition to monthly reviews, review your accounting and bookkeeping records in detail at the end of each quarter to note any trends, such as a decrease or increase in sales, an increase in expenses, or signs of late payments from customers. Knowing the right numbers will help you plan for more efficient cash flow in the future.
7. Set up reminders for important deadlines
Business owners spend most of their time jumping from one task to the next. With so much to do, it’s easy to forget to pay VAT, payroll and regular bills. Set reminders for yourself so you don’t miss deadlines that could result in fines or the wrath of your partners. You can use your electronic calendar or even your smartphone.
9. Record your cash payments
It’s easy to forget this when you first start your business, but you also need to keep track of your cash payments. Any money you receive from your business, or even goods for your business, should be deposited into your bank account before it is spent. It’s tempting to use cash to buy goods right away, but this can mess up the accounting and bookkeeping system.
When recording cash payments, remember to note which customer made the payment so you don’t have to track it down later. If you don’t know how to record the details of cash payment in your accounting and bookkeeping software, ask your accounting and bookkeeping to set it up so you can use it properly.