Account Keeping Plus – Administration, Bookkeeping, Compliance News & Tips MYOB Reckon Quickbooks Xero Software TrainingSmall Business

Making Business Books and Accounting Come Alive! MYOB Reckon Xero


Leave a comment

Bookkeeping – 7 tips for business health by keeping healthy books/accounts!

Bookkeeping – 7 tips for business health by keeping healthy books/accounts!

Bookkeeping – 7 tips for business health by keeping healthy books/accounts!

Here are some timely reminders from J T Ripton at smallbizdaily.com

Accounting is often one of the toughest jobs for small business owners, especially those who don’t have a lot of experience or a strong background in bookkeeping. Following a few simple tips throughout the year can make it much easier to track expenses and file taxes when the time comes.

1. Plan Ahead

The first step is to look ahead at the potential needs for your company and plan for these expenses. For example, if you know that you will need to replace expensive equipment in the near future, make sure to set aside funds every month to cover the costs. Other major expenses that may arise include office supplies, inventory, maintenance, and repairs. You can also set aside money each month to cover the annual taxes, so you won’t stress about the amount you need to pay when April 15 arrives.

2. Use Reliable Software

Business bookkeeping software has come a long way over the past decade, and some programs make it much simpler to input expenses and cash flow. MYOB, Reckon and Xero allow you to keep everything you need in one place for easy recovery as needed. From tracking the status of unpaid invoices, to creating customized invoices, to tracking billable hours and budget spent, online accounting software is a great way to save time and money. Some programs like Dropbox and  Google Drive also offer cloud access to your files, which means that you can pull up information from anywhere instead of having to go to the office to find a document or receipt.

3. Separate Business and Personal

If you use your business credit card to pay for a personal expense, make sure to track that and separate it as soon as possible. It is much easier to separate expenses if you use separate accounts to pay for them, but you may accidentally use your business card for a non-company purchase. Business costs are tax deductible, so make it easier on yourself by separating them every time you make a purchase.

4. Schedule Yourself

When it comes to bookkeeping, it might seem easier to just put it off until the end of the year. However, this is going to result in a big headache when you are trying to track down receipts and invoices that may be months old. Schedule time each week or each month to work on your books and stay as current as possible. It may be tempting to skip this every so often, but when you can stick to the schedule, it will be much easier to stay on top of the finances without feeling so stressed.

5. Review Invoices

Be sure to keep close track of your invoices, since some (clients) are notorious for paying bills late. You can probably use your accounting software to run a monthly report and determine what invoices are still outstanding. This gives you the flexibility to send reminders and follow up on outstanding bills before too much time passes. It is also smart to keep a close eye on your cash flow statement, so you can avoid the dreaded insufficient funds message on a payment.

6. Call in a Pro

For some things, it is definitely worth the investment to bring in an expert. You may rely on a financial advisor who specializes in your industry, or you might just need an accountant who can pay your taxes and payroll. You can even use a student intern who is working on an accounting degree if the budget is tight.

7. Track Expenses

Most experts discourage business owners from using cash to pay for any business expense, since it can be very difficult to track. When you use a credit card or debit card, you can view the transactions right away and make sure that all items are true business expenses to avoid issues with write-offs and taxes.

Accurate bookkeeping is an important part of business ownership, so it is crucial to stay on top of the expenses and invoices to prevent problems. If you have questions about bookkeeping, you can always rely on an expert, but once you have your system down, it should be much easier to keep track of the money coming in and out of your company each day.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


2 Comments

Bookkeeping – Quick tip – Don’t use “Miscellaneous” or “Sundry” all the time for Miscellaneous expense in the accounts

Bookkeeping – Quick tip – Don’t use “Miscellaneous” or “Sundry” all the time for Miscellaneous expense in the accounts

Bookkeeping – Quick tip – Don’t use “Miscellaneous” or “Sundry” all the time for Miscellaneous expense in the accounts

If you use a “Miscellaneous Expense” or “Sundry” account, it can indicate lazy bookkeeping. It is also no help when you or the bank reads your Profit & Loss! What is in that account will be the question!

It is better to use the closest correct expense account or to add a new account to better capture the expense type. Also use the memo in the transaction, to fully describe the expense, and invoice number if not using purchases. The more detail you put in now, then you won’t have to sift through your papers later to find out what the expense was, or dig out a copy for your accountant (or the taxman)!

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


Leave a comment

Bookkeeping – Paid Parental Leave – What is it and how to do the bookkeeping

Bookkeeping – Paid Parental Leave – What is it and how to do the bookkeeping

Bookkeeping – Paid Parental Leave – What is it and how to do the bookkeeping

The Paid Parental Leave here we explain what it is and how to do the bookkeeping in your accounts. The scheme became compulsory on 1 July 2011 – it is an offer from the government of up to 18 weeks paid parental leave is offered to eligible working parents of children born or adopted on or after 1 January 2011. The government makes a payment to the employer to then pass on to the employee. This post explains generally what is involved to setup and record paid parental payments within your software.

What is the current rate of parental leave?

The rate is paid at the National minimum wage. For more information see Paid Parental Leave for employers.

How to do the bookkeeping

1.     Create an account to track parental leaveWe need to create a Liability account to track your Parental Leave. Depending on your Parental Leave reporting obligations, you may want to create an Expense account to track this leave instead of a Liability account. Speak to your accountant or the ATO for the appropriate solution based on your circumstances.

2.     Create a new wages category

3.     Exempt Paid Parental Leave from calculating superannuation

4.     Exempt Paid Parental Leave from accruing entitlements – depending on the way the employee is set up

a.     Hourly employeesthe entitlement will not accrue as there are no hours to calculate the percentage. This seems contradictory, but normally hourly employees will accrue leave as a percentage of hours worked. While they are on Paid Parental Leave, they are being paid via a Salary Wage category, rather than an Hourly Wage category. Therefore having no hours on the paycheque means that no leave will accrue.

b.     Salary Employeesneed to have the Entitlement(s) deselected in their card. This is because generally these employees will be set to accrue a flat amount of hours per Pay Period/Month/Year, and unless the entitlement is deselected in their card, the entitlement will continue accruing throughout the period of their Paid Parental Leave.

5.     Note: When the employee finishes the Paid Parental Leave you will need to select these entitlements again so that the leave entitlements will accrue.

6.     Action – when my employee is taking paid parental leave?
In MYOB for example, you go to the standard pay and zero all the salary or hourly $ amounts, and against the Paid Parental leave category, enter the amount that is to be paid.

7.     We are now ready to process Paid Parental leave payments for your employees. When you have finished paying the paid parental leave payments, you can use the Reset to Original Amounts button on the Payroll Details tab of the employees card (as shown above) to restore the values back to the standard hours.

8.     Receiving the payment from the government. When the employer receives parental leave payment from the government, this needs to be recorded as a Receive Money transaction into the Liability account created.

9.     Note – Paid parental leave and Payment SummariesIf you include the paid parental leave amount in the Gross Wages on your Payment Summary, you will need to account for this if you attempt to reconcile the total from the Payment Summaries with the total in your Wages & Salaries expense account. The paid parental leave amount is not shown as an expense, and therefore it is expected that the Payment Summary total will be higher than the total of the Wages & Salaries expense account. For more information on Payment Summaries, see the MYOB support note Preparing and printing Payment Summaries.

10.   Removing paid parental leaveWhen an employee returns to work after parental leave, their card needs to be updated so the Paid Parental Leave payment will be removed from the employee’s standard pay, and their normal Base Salary will be reinstated.

Need help? Not sure? Call for FREE 30min advice / Strategy session today!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


Leave a comment

Bookkeeping – Entering Annual Leave calculation that was missed

Bookkeeping – Entering Annual Leave calculation that was missed

Bookkeeping – Entering Annual Leave calculation that was missed

Client emailed Sorry to be a nuisance… this is so confusing and I am stuck.

Staff X took a week off from Monday 22nd February to Monday 29th Feb for his honeymoon and was back to work on Tuesday 1st March.

         Paid X 18/02/2016 covering period Mon 8th to Sun 14/2

         Paid X 3rd March covering period 22nd   Feb – 28th Feb

         Did not pay X on 25th Feb – covering period Mon 15th to Sun 21st

         Don’t know what I was thinking here….

How do I enter the correct information (45 hours annual leave) in MYOB?

Answer It is a matter of looking at what you HAVE DONE in MYOB, and working out what is missing –

Here is a summary of what I understand – see excel FREE download

You can alter amounts if you wish (NOT in blue boxes as they have formulas).

It just looks like do the NEXT pays to catch up Hol hours and make note in the memo of the payslip before recording.

Maybe need to redo an earlier pay – see notes in the excel.

If still not sure, we can discuss.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!


Leave a comment

Bookkeeping – Helpful Tool – Teamviewer – How to download and use for meetings or to login to your office or other PC

To Install – TeamviewerLogo(it should take about 5 min)

1.     Go To https://www.teamviewer.com/en/index.aspx

2.     Click Download – green button

DownloadButton

3.     Follow prompts – click “Save” in the Question box at bottom of screen (not Run yet)

Teamviewer1

4.     Then click the “Run”

Teamviewer2

5.     After a few minutes, Teamviewer should open up ready to use

6.     You will have a Unique number – “Your ID”, and a Password these are used on the other device to login to your PC

Teamviewer3

7.     Then start using it for meetings, logins remotely and more – see lower down at http://www.teamviewer.com/en/ !

8.     There is an option to set up for unattended access (see the last video in the Videos link in Help (link below)

9.     For Help see – http://www.teamviewer.com/en/help/index.aspx

Need help? Not sure? Call for FREE 30min Advice / Strategy session today!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


3 Comments

Cashflow Tips – When growth can be a disaster for a business if not handled well

Cashflow Tips – When growth can be a disaster for a business if not handled well

Cashflow Tips – When growth can be a disaster for a business if not handled well

The main result business owners desire is that growth will solve most business problems. But growth can also be a disaster for a business if not handled well – and here are some common miss-beliefs.

1.     Build it and it will sell itself – Many new ideas come to entrepreneurs all the time – but not everything succeeds for outside and internal reasons – no real demand, lack or poorly-prepared marketing plan (often a weak spot for small business owners), lack of financial budget plan

2.     I can/will do it all – Common to fall into the “if it’s to be done no-one does as well as I do it” trap. Yes in the early days you have to do most yourself – but document the method that you find works best, then teach someone else to do it so you can move on to other things. A good explanation is found in “The E Myth” by Michael Gerber. Paint a clear picture of what the future business will look like/become, write out the Organisation chart of the key roles of the organisation and job descriptions, find/create the systems required to make the business efficient, and get employment/HR help a sit is a whole new mine-field of managing people and financial responsibility!

3.     Bigger is better When owners work on business growth, they often focus on sales, but a look at industry benchmarks often reveals that businesses in higher sales brackets aren’t always the most profitable.  Often, businesses with modest turnover can achieve better profits, where-as too often, as a business grows, overheads can get out of hand and the extra sales get eaten up and profit falls.  So sales and marketing plans are very important – and testing and measuring as you go is paramount – set budgets and create reports at least monthly to track how you are going.

4.     Growth solves Cashflow problems Nothing just happens without careful measuring and managing carefully!!! Ensure the budget is created as already mentioned, know your margins (Gross Profit, Net Profit as minimum). See if there are supplier discounts with larger purchasing volumes, and importantly, if you sell on account instead of retail, keep monitoring debtor days and don’t get slack on customers taking their time to pay!

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


1 Comment

Cashflow Tips – What the Cashflow Statement shows

Cashflow Tips – The Importance and Productive Boost of Team-Building

The Cashflow Statement is also called the Statement of Cashflows, and here we will begin to look at what the statement shows us. It is one of the 3 main financial statements that businesses report on – the other 2 are Profit & Loss, and The Balance Sheet.

The cash flow statement reports the actual cash generated and used during the time interval stated in its heading. The period of time that the statement covers is chosen by the company, for example, “For the Three Months Ended 31 December, 2015” or “The Fiscal Year Ended September 30, 2016”. Most common is annual.

The cash flow statement actually uses data and the CHANGES between periods from the Profit & Loss and Balance Sheet, and organises and reports the cash generated and used in the following categories:

Operating, Investing and Financial activities

Cash Flow Stmt SummaryWhat the Cashflow Statement shows

The profit & loss or Income Statement is prepared under the accrual basis of accounting, meaning the sales/revenues reported may not have been collected yet. Similarly, the expenses reported on the income statement might not have been paid. You could review the balance sheet changes to determine the facts, but the cash flow statement already has integrated all that information. As a result, savvy business people and investors utilize this important financial statement.

Here are a few ways the statement of cash flows is used.

  1. The cash from operating activities is compared to the company’s net income (profit/loss). If the cash from operating activities is consistently greater than the net income, the company’s net income or earnings are said to be of a “high quality“. If the cash from operating activities is less than net income, a red flag is raised as to why the reported net income is not turning into cash.
  2. Some investors believe that “cash is king”. The cash flow statement identifies the cash that is flowing in and out of the company. If a company is consistently generating more cash than it is using, the company will be able to increase its dividend, buy back some of its stock, reduce debt, or acquire another company. All of these are seen to be good for shareholder value.
  3. There are also some financial models that use the cash flow.

The statement of cash flows has four distinct sections:

  1. Cash generated from operating activities
  2. Cash generated from investing activities
  3. Cash generated from financing activities
  4. Supplemental information.

The differences in a company’s balance sheet accounts from one period to the next, will provide much of the needed information. The changes—or differences—in the account balances will likely be entered in one of the sections of the statement of cash flows.

Of the four sections of the statement of cash flows, those balance sheet accounts which affect that section include –

1. Operating Activities

This section reports the net income and then converts it from the accrual basis to the cash basis by using the changes in the balances of current asset and current liability accounts, such as:

  • Accounts Receivable
  • Inventory
  • Prepaid Insurance
  • Other Current Assets
  • Notes Payable
  • Accounts Payable
  • Wages Payable
  • Payroll Liabilities
  • Interest Payable
  • Income Taxes Payable
  • Unearned Revenues
  • Other Current Liabilities

Noteas well as using the changes in current assets and current liabilities, the operating activities section may list adjustments for depreciation expense and for the gains and losses on the sale of long-term assets/investments.

2. Investing Activities

This section reports changes in the balances of long-term asset accounts, such as:

  • Long-term Investments
  • Land
  • Buildings
  • Equipment
  • Furniture & Fixtures
  • Vehicles

Investing activities involve the purchase and/or sale of long-term investments and property, plant, and equipment.

3. Financing Activities

This section reports changes in balances of the long-term liability and stockholders’ equity accounts, such as:

  • Notes Payable (generally due after one year)
  • Bonds Payable
  • Deferred Income Taxes
  • Preferred Stock
  • Paid-in Capital in Excess of Par-Preferred Stock
  • Common Stock
  • Paid-in Capital in Excess of Par-Common Stock
  • Paid-in Capital from Treasury Stock
  • Retained Earnings
  • Treasury Stock

Financing activities involve the issuance and/or the repurchase of a company’s own bonds or shares as well as short-term and long-term borrowings and repayments.

4. Supplemental Information

This section of the cash flow statement reports the amount of interest and income taxes paid as well as significant exchanges not involving cash. For example, the exchange of company shares for company bonds would be reported here.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes”

There’s 18 that the Tax Office see regularly – Get them right!