The majority of small business owners struggle with the account keeping/bookkeeping/record keeping for their business – most people don’t like it or are confused by it! But the law is that every business must maintain accurate and timely (up to date) financial records (books). Like many things in life – better to face it – regularly and with as less stress as possible – and it IS possible!
Here are the 5 ways to start –
1. A set time each week to DO the books
Be strong and disciplined! Don’t keep saying you will do it later – do SOME each week
2. Separate business bank account for business earnings and expenses
It is very important to keep your private transactions separate from your business transactions. It makes it easier for your accountant as well as yourself!
3. Software that suits your business
If you are unsure which software to select, contact a bookkeeper, business consultant or your accountant who can better advise you before you buy There are desktop and cloud solutions. With many software moving to the cloud, one key benefit is that you can access your financials anywhere, anytime or have your bookkeeper and accountant check information for you.
Your business datafiles will always be backed up regularly in the cloud. However, always ensure you keep backups of your financial data as an added security measure. With desktop software, you will have to get into a habit of regularly backing up your files.
4. Get all your tax and compliance obligations right
All businesses are required to register for an ABN, and 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 some tax on their behalf.
You are also obliged to complete and lodge monthly/quarterly Business Activity Statement (BAS) with the ATO. With the appropriate accounting program and setup, you can have this information at your fingertips. This way you create systems to help you streamline and automate your business processes for you to stay compliant.
5. Keep your receipts
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
- Stocktake records at end of financial year and asset register etc.
- Anything else with a monetary value to the business
You could create digital files on your computer to store this information or keep a well organised filing cabinet.
6. Get a great account/book keeper?
As your business grows you may need to engage the assistance of a great bookkeeper, which is also tax deductible. Hiring a bookkeeper helps you focus on growing your business while ensuring your record keeping is up to date. Ask us to give a quote and the extras such as yearly analysis and graphs included for FREE in our service – want to see a sample – email for a copy – firstname.lastname@example.org.
Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – no-one offers as much!
Email email@example.com or call 0407 361 596 Australia
You will also get a FREE set of TEMPLATES to Organise your records – including a monthly check-sheet for the whole year! FREE, no obligation