Bookkeeping plays an important role in running a successful small business, but it may come with a lot of challenges and opportunities. Between preparing a bank reconciliation statement, tracking business expenses, and preparing for tax time, bookkeeping can become a daunting task, and you may have to spend a lot of time. However, bookkeeping doesn’t have to be a stressful task. With the right tools, guidance and strategies, you can simplify the process, reduce stress, and save valuable time. In this blog post, we’ll discuss some tips and tools to make bookkeeping easier, so you can focus on other important tasks to run your business.
Why Does Your Business Need Bookkeeping Services?
Before discussing bookkeeping strategies to stay organised, it’s important to know why your business needs bookkeeping services:
- Understand how your business is doing
Accurate and organised financial records can help you keep track of the cash flow of your business, identify trends, and understand how much your business is making or losing. Without accurate business books, you won’t be able to see how your business is doing.
- Stay compliant with the ATO
The Australian Taxation Office needs every business to maintain updated and accurate financial transactions for at least five years. Without organised financial records, you may have to face problems, like mistakes in GST, BAS, or tax returns, which can lead to penalties imposed by the ATO. Many of you may get confused between a tax agent and a BAS agent when it’s tax season. To get more clarity, read our previous blog on tax agent vs BAS agent.
- Save time and reduce stress at tax time
Accurately organised financial records can streamline the process of filing your Business Activity Statement and income tax returns, which can save you from last-minute scrambling.
Good bookkeeping is not just about staying updated with the new tax laws and bookkeeping requirements, it also acts as a strong foundation that can help you make the right business decisions for business growth.
How Can Bookkeeping Help You Stay Organised?
Use accounting software
Choosing accounting software is one of the best ways to streamline bookkeeping for your company. Tools like MYOB, Xero, and QuickBooks can help small business owners. Here are the benefits of choosing accounting software:
- Automation: Accounting software can automate repetitive tasks like expense tracking, invoice generation, and GST calculations.
- Real-time access: You can access your financial data anywhere, anytime, from any device.
- Bank Feed Integration: Connect your business bank accounts to automatically sync transactions, simplifying the reconciliation process.
- Collaboration: Share data with your accountant or bookkeeper instantly, minimising the need for constant communication.
Schedule bookkeeping sessions
Many small business owners leave bookkeeping until the last minute, which is one of the biggest mistakes made by business owners. Procrastination can result in errors and stress, especially during tax season or BAS lodgment. Instead, schedule bookkeeping tasks so you can stay organised with current business books. Here’s a simple way:
- Weekly: If you run a business with complex financial transactions, you need to record them regularly or weekly. Reconcile bank statements, organise receipts, and review unpaid invoices.
- Monthly: You may be advised to create financial reports, pay bills, and check cash flow each month. You can also engage bookkeepers in Melbourne to help you prepare financial statements.
- Quarterly: Make sure to prepare and file your BAS with the ATO.
By scheduling time to perform bookkeeping tasks, your company will stay on top of business finances and avoid the end-of-quarter panic. If you don’t have time to complete these tasks, you can hire a bookkeeper.
Separate personal and business finances
Using business finances for personal use or using personal finances for business use can trap small business owners. It will not only make bookkeeping complicated, but it can also increase the risk of missed tax deductions and mistakes.
Conclusion
As a business owner, your business records must be accurate and organised. You can get reliable bookkeeping services for your business to ensure that you have accurate financial records that can help you during tax season, and you can make informed business decisions.