As a small business owner, effective bookkeeping is important for maintaining financial control, ensuring compliance with tax rules, and making informed decisions. However, many business owners find managing their own small business bookkeeping time-consuming and daunting task. In this blog, we’ll discuss the basics of bookkeeping services and how a bookkeeper can help you manage your business finances.
Why does your business need bookkeeping services?
Various factors can influence you to have someone to look after your business finances by managing your business books.
Finance tracking
Bookkeepers track how much money goes in and out of a company. This way. Once you add up total payments and total revenue, you can have a clear picture of your business’s cash flow management and how much cash you have. Small business bookkeeping services help you track income, financial transactions, and expenses in an organised way.
Decision-making and budgeting
Bookkeeping allows businesses to create budgets, make informed business decisions, and set financial goals. Timely access to financial information makes you able to make informed business decisions about inventory management, pricing, and resource allocation.
Business growth
As a small business grows, its financial complexities also increase. Bookkeepers can manage this growth by providing data to attract investors and make expansion decisions. If you have any investors, they may want to check data to determine your business growth, which starts with bookkeeping.
Compliance
Consistent and accurate bookkeeping is crucial for governmental compliance, disputes, audits, fraud detection, and more. Small businesses need to follow tax laws and regulations. Proper bookkeeping ensures correct financial records, making it easy for your tax accountant in Melbourne to lodge taxes accurately and avoid penalties or audits. No business wants to provide messy records to the Australian Taxation Office for audit. BAS compliance is crucial, so it’s crucial to stay on top of your business books to get the most out of your tax returns.
How to organise business finances with bookkeeping?
For successful bookkeeping, you must seek help from a reliable bookkeeper to set up your books and keep them up-to-date and accurate.
Record all financial transactions
Every business encounters several financial transactions daily, and it’s crucial to record each one. Recording all financial transactions can help you know your profit and prevent possible disputes with clients. You must understand the cash flow and revenue of your business, so it’s vital to record every transaction in an Excel spreadsheet or bookkeeping software.
Bank account reconciliation
Bank reconciliation is a vital part of bookkeeping. Reconciling is all about matching financial transactions recorded in your business books against financial transactions recorded in your bank statements. Bank account reconciliation is important, that’s why a bookkeeper reconciles the bank accounts and business books frequently. You can reconcile your bank accounts daily, weekly, or monthly based on your financial transactions.
Update accounts receivable
Accounts receivable indicates open invoices and other sources of income that you expect to receive but haven’t yet. Understanding received and earned income is crucial for a business’s financial status. Accounts receivable are a vital part of your business’s cash flow and revenue, so keeping them updated is an important part of bookkeeping. Moreover, timely sending invoices and reminding clients about unpaid invoices is also vital for bookkeeping. This includes tracking due dates, dating invoices and responding after a specific deadline for payments has crossed.
Update accounts payable
Accounts payable, like accounts receivable, are crucial for managing money going out of your business, including payments to suppliers and bills. It represents future payments for transactions already completed, such as received materials. Keeping accounts payable accurate is essential for understanding your costs, revenues, and cash flow.
Manage payroll
Employees are crucial to a business, but they need to be paid properly. Managing payroll ensures timely payments, handles hiring and departures, updates employee details, provides payslips, calculates taxes, and meets benefits obligations. It also involves keeping payroll reports up-to-date and ensuring your payroll software works well, which is important for tax payments to the ATO.
Conclusion
As a business owner, it’s crucial to have organised business books. If you don’t have enough time to manage your business books, you can get our Reliable Bookkeeping Services.