Congratulations that you have taken the decision to commence your own business! We’re sure it’ll be an exciting and rewarding moment for you, as it should be. It will also bring with it some difficulties and a lot of effort. There are, however, some very practical things you can do right away to lay a solid basis for your new business. Setting up your bookkeeping right from the start is one of the least “glamorous” yet most significant things you can do. Below are the bookkeeping strategies suggested by bookkeeping services experts:
- Analyze the structure of your business
You’ll need to choose a business structure based on whether you want to “launch large” or build your company gradually over time. For the majority of new businesses, this entails forming a sole proprietorship, partnership, or limited liability company (LLC). Taxes, deductions, reporting, fees, and bank accounts are all affected by this decision. A separate bank account is necessary regardless of whatever option you choose. Sole owners aren’t obligated by law to keep company and personal expenses and payments separate, but it’s usually a good idea.
- Choose a Bookkeeping Structure and Method
Bookkeeping differs from the broader category of “accounting” in that it does not always consider the large picture. Instead, it entails tracking transactions, sales, and outgoing payments on a daily basis, categorising them appropriately, and bank reconciliations on a regular basis. Hire a bookkeeper or utilise a software tool like QuickBooks to do it for you. Choose between cash and accrual accounting, and keep in mind that most calculations are done for you by a qualified accountant or software programme.
Be aware of other taxes that are specific to your sort of business, in addition to business and income taxes. Import taxes on goods acquired from other nations, for example, may be your responsibility. Sales taxes can also be tricky, especially if you do business online. Keep up with new legislation and have a mechanism for collecting and paying sales taxes in place.
These are just a few considerations to keep in mind while creating the structure of your new firm. It’s always a good idea to seek the advice of a local professional tax return accountant and bookkeeper in Melbourne, since they have years of expertise and expertise to share – and can help you save time and money in the long run.
- Establish internal controls
To limit the danger of fraud, you should implement internal controls in your company’s bookkeeping rules and practises. This includes processes that require making or receiving payments of any kind, as well as dual control. One employee should write the cheque, another should reconcile the bank account, and a third should sign to authorise the payment.
When it comes to internal controls, the person who opens the mail should not be the same person who is in charge of accounting.
The person who opens the mail should keep a real paper log of all cheques received and when they were received. The checks, together with a copy of the list, should be given to the small business bookkeeping services provider or an accountant.
- Make use of accounting software to track expenses
All of your business expenses should be meticulously recorded. This entails saving and keeping track of receipts on a weekly, if not daily, basis. Daily bookkeeping duties will eat up a lot of your time if you don’t have a good core accounting software system (like QuickBooks) and cloud-based expenditure technology. This load will only rise as your company expands if you don’t use technology.
When deciding which accounting software to utilise, don’t just think about whether it satisfies your existing bookkeeping requirements. Each software system and technology should also be evaluated for its capacity to scale with your organisation as it expands and your back office demands develop.
- Your Chart of Accounts should be optimised
To track spending for tax and compliance purposes, most organisations use a simple, alphabetical chart of accounts. However, using your chart of accounts as the foundation of a management accounting tool is the ideal practice to assist you in keeping track of your customer acquisition expenditures, break-even point, and expense return on investment.
Separating your General and Administrative (G&A) expenses will let you see what it costs just to keep the lights on, and Product or Industry specific expenses will show you the discretionary costs you may cut in a downturn.
Get the best Bookkeeping Services at Reliable Bookkeeping Services
At Reliable Bookkeeping Services, Separating your General and Administrative (G&A) expenses will let you see what it costs just to keep the lights on, and Product or Industry specific expenses will show you the discretionary costs you may cut in a downturn.
These basic services can be built up to a full-service management accounting option, which includes a dedicated team of bookkeepers and accountants that handle daily, monthly, and quarterly chores.
Your company will be able to anticipate and mitigate risks and market issues, streamline operations, improve pricing, and boost profit margins with a robust back office, ensuring long-term success.
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