Bookkeepers play an important role in any business as they are responsible for maintaining updated financial records of all the transactions. These organised records provide financial information to business owners about the financial status of their company. Bookkeepers in Melbourne help businesses maintain positive cash flow and minimise the workload of the business owners. Every organisation needs help from a professional bookkeeper who can help the business grow.
This is the reason why most business owners depend on a reputable company for bookkeeping services to boost the cash flow and profitability of their company. Their advice helps in determining the strengths and weaknesses of the company. The information is used by the business owner to make informed business decisions and improve productivity and revenue.
Why is cash flow important?
It’s crucial to have a positive cash flow for a company to run smoothly and achieve long-term goals. A positive cash flow means you have enough money coming in than going out. It enables a business to cover its expenses and build up reserves for economic downturns or unexpected expenses. On the other hand, negative cash flow refers to expenses that are bigger than your earnings. It can result in a financial crisis, like not being able to pay taxes or wages.
What is a cash flow statement?
A cash flow statement is a summary which includes the cash coming in and out of your business for a specific time period. A cash flow statement will help you know where your money is going and coming from. With a cash flow statement, you can forecast cash flow.
Significance of bookkeeping in cash flow management
When it comes to cash flow management, you can get help from a professional bookkeeper who can help you improve cash flow. Here are a few steps on how a bookkeeper can help:
Organise your accounts for better cash flow management
The first step to improve cash flow is to get your business books organised, so you know exactly how much cash is coming in and going out of your business. With effective accounting software, a bookkeeper can make the task of monitoring expenses and income super easy.
Cash flow forecasting
Bookkeepers follow a straightforward approach and create a cash flow forecast, which forecasts the income and expenses on a monthly and quarterly basis. The cash flow estimate allows effective management of liquidity, which shows that the business has sufficient funds to meet its monetary requirements. The forecast will help you know in advance about the amount that will be moving in and out of a business at any specified time, so that business owners can make the right business decisions.
Conduct bank reconciliation frequently
All the bookkeepers prepare a bank reconciliation statement, as this allows them to match the bank statements with the company’s financial records. It helps in spotting any discrepancies in the business books that can occur because of forgotten invoices, cash transactions, and errors in calculations. It provides the business owners enough time to make corrections to the records before submitting the reports to the ATO to avoid penalties. It helps in tracking the administrative tasks and spotting loopholes in them.
It is also advantageous in identifying any fraudulent activity and addressing accounting mistakes that need to be managed immediately. Thus, bank account reconciliation helps in maintaining transparency and clearing all doubts.
Invoicing proactively
Managing positive cash flow needs the inflows to keep flowing daily with no delays. The bookkeepers maintain the receivables by sending invoices when the deliveries are made to the customers. The invoices have the terms of payment mentioned on the bills.
Reduce expenses with better decisions
Bookkeepers and taxation accountants in Melbourne can help you save taxes by claiming potential deductions for your Melbourne-based business. Additionally, well-organised business books will help you file business taxes on time without spending hours finding and organising records at the last minute.
Conclusion
Getting help from a bookkeeper is crucial for businesses as it makes their life easier. With reliable bookkeeping services, you can manage the financial elements of the business and ensure that it is growing and moving in the right direction.