Did you survive the EOFY Rush?
Here are 7 Great Bookkeeping Tips To prepare for next year
Did you survive the EOFY rush? Is bookkeeping the last thing on your mind? Do you avoid it at all lengths? Well, join the club! Although managing your financial records is not exciting it’s one of the most important things to be on top of.
It is so easy for business owners to neglect this aspect of their business until the end of the financial year (EOFY) is upon them and then have to submit an array of compliance information to various government institutions. It is a legal requirement for every business to maintain accurate records and to stay compliant.
By having the right tools, software and processes in place from the very beginning, you can streamline keeping your data up to date, benefit from updated financial information, avoid the EOFY rush and your business will certainly be a better financial position to plan for growth.
7 easy steps to help get you survive this:
- Allocate some time each week to do your bookkeeping
It is crucial to be on top of this. By reviewing your accounts regularly you will be able to identify how your business is performing and have a better handle of your cash flow.
- Separate business bank and credit card accounts from personal
It is important to keep your private transactions separate to your business transactions. It might be worthwhile applying for a business credit card, and ONLY use it for business transactions. This will streamline your data entry and reduce your workload.
- Use online accounting software that is best suited to your business.
If you are not sure which software is best for your business you may contact a business consultant or accountant that can better advise you. Solutions such as MYOB, Xero or Quickbooks are widely used. Cloud software allows you, your accountant and bookkeeper to access your financials anywhere, anytime so you can all work collaboratively. Most importantly, your data will always be backed on secure servers in the cloud.
- Get all your tax and compliance obligations right
Make sure you have an active ABN, if your turnover is more than $75,000 then you must apply for GST registration. You must also keep receipts for all acquisitions in order to claim on your expenses. If you employ staff, you must also register for PAYG withholding Tax. This is where you pay staff and withhold tax on their behalf and then remit to the ATO.
You are also obliged to complete and lodge monthly/quarterly Business Activity Statement (BAS) with the ATO. With the appropriate accounting program you can prepare and upload your statement automatically. Simple processes like this will help you to stay compliant.
- Keep your receipts and documents
The ATO requires you to keep records for a minimum of five years. The records you are required to keep and have accessible upon request are:
Invoices and receipts you provide for sales or services rendered by your business.
Invoices for goods, services or other business acquisitions purchased for your business.
Records of payments made to employees plus other organisations on their behalf like Superannuation funds and PAYG tax.
All financial statements including profit and loss statement and balance sheet.
Tax Return information.
Bank accounts and credit card statements
Stocktakes records at end of financial year and asset register etc.
Anything else with a monetary value to the business
You could setup a well organised electronic filing cabinet so you can do away with paper trail.
If you want to avoid excessive and boring data entry, you can use tools such as Receipt Bank to automate the process. Also making use of the bank feeds in your accounting software and setting up the rules to automate data allocation will also reduce your work load considerably. Your accounting software should also allow you to attach pdfs of bills to your supplier invoices, which means that you don’t need to keep paper copies as well.
- Hire a great bookkeeper
As your business expands you may need to engage the assistance of a great bookkeeper, keep in mind that this service is also tax deductible. Outsourcing your bookkeeping helps you focus on growing your business while ensuring your record keeping is up to date.
Don’t leave yourself exposed throughout the coming year and endure unnecessary stress, follow this easy guide and you will have a stress-free EOFY in 2018.
- Check the health of your business regularly.
Don’t just rely on the balance of your bank account, always take the time each week/month to evaluate how your business is performing. Run some reports from your accounting software that reflect how your business is travelling. Usually reports such as the profit and loss, aged receivables, aged payables and balance sheet are vital to know how your business is performing. When your records are being kept up to date you will have this information at your fingertips. This way you will identify small issues before they become major problems!