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

Business Finance 101 – COS or COGS – Cost of Sales or Cost of Goods Sold – What it means

Business Finance 101 – COS or COGS – Cost of Sales or Cost of Goods Sold – What it means

COS or COGS – Cost of Sales or Cost of Goods Sold – What it means

Cost of Sales (COS) or Cost of goods sold (COGS) is the cost of the product that was sold to customers. It includes the cost of materials and direct labour used to produce the goods ready to sell. The cost of goods sold is reported on the profit and loss at the time/period the sales revenues of the goods sold are reported.

A retailer’s cost of goods sold includes the cost from its supplier plus any additional costs necessary to get the product into inventory and ready for sale. For example, a store purchases a book from a publisher. If the cost from the publisher is $60 plus $5 in delivery costs, the store reports $65 in its Inventory account until the book is sold. When the book is sold, the $65 is removed from inventory and is reported as cost of goods sold on the profit and loss.

COGS is usually the largest expense on the profit and loss of a company selling products or goods. Cost of Goods Sold are deducted from the sales/revenue.

Cost of goods sold is calculated in full, as follows:

Cost of beginning inventory + cost of goods purchased (net of any return stock) + freight-in – cost of ending inventory.

This account balance or this calculated amount will be deducted from the sales amount on the income statement, leaving a Gross Profit.

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much! 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

Xero – Handling Overpayments in Xero

Xero – Handling Overpayments in Xero

Handling Overpayments in Xero

From the Xero blog, here is how to handle overpayments in Xero and resolve them –

Overpayments can be challenging at times, or even forgotten. There are some easy ways to handle overpayments within Xero.

Let’s take a look at a few ways we can record an overpayment and apply this to an invoice/bill or refund it directly. In Xero, the term “invoice” relates to a sale, and a “bill” relates to a purchase. I’ve only referred to invoices below, but these processes relate to both.

To Record (handle) an Overpayment, you can either:

  • Simply enter the amount paid directly onto the invoice, and if the amount exceeds your invoice total, Xero will automatically calculate an Overpayment transaction.
  • Create an Overpayment Receive Money / Spend Money transaction in your bank account
  • During reconciliation, create an Overpayment Receive Money / Spend Money transaction

Allocate or Refund an Overpayment (Resolve the overpayment)

Once the Overpayment transaction has been entered into Xero, a cash refund can be recorded or you can allocate the overpaid amount to an invoice for the same Contact in Xero.

  • The Allocate option will appear in the Overpayment Options drop down menu while viewing your Overpayment transaction.
  • If a contact has a new invoice you created Xero will ask if you wish to allocate the overpaid amount against this invoice.
  • You can record Cash Refunds on the Overpayment directly and then reconcile them with your Bank Statement line.

(XERO) have some great Help Centre pages that step through Overpayments in Xero. You can check them out here, and call us for help!

Need help? Not sure? Call for FREE 30min advice / strategy session today! 0407 361 596 Aust

***BEFORE you BUYAsk us for a competitive software price BELOW retail – No obligation!

You also get FREE 30 min to assist in setting up your company in the software, and FREE ongoing email or phone support – no-one offers as much!

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

MYOB / Reckon / Quickbooks / Xero – Clear / Remove / Delete the “to be printed” items from print queue

MYOB / Reckon / Quickbooks / Xero – Clear / Remove / Delete the “to be printed” items from print queue

MYOB / Reckon / Quickbooks / Xero – Clear / Remove / Delete the “to be printed” items from print queue

A client called and saidWe had ticked in our invoices to be printed and never did the printing. Now when I go to print a batch that I want to print, all these non-printed invoices are highlighted. There are about 400 so it does take some time to scroll to the few I want. Is there any way I can delete this instruction without bringing each invoice up and deleting the instruction?

A good solution 1 – Turn off your printer – go to print all unwanted items, then delete the print job in the queue on the printer (usually the printer status window that opens, or from icon lower RHS in task bar or hidden icon area.

A good solution 2 – Choose a PDF printer to create a file – it may need some time to be left to run.

And sometimes using the Reckon PDF creator may not take them off and they re-appear next time, so try using Cute PDF (download FREE here http://www.cutepdf.com/Products/CutePDF/writer.asp  and click the top “Free Download” on the right, it will also automatically tell you to download the Ghostscript converter, the second free download on the right, say yes as well) or another PDF software.

Need help? Not sure? Call for FREE 30min advice / strategy session today! 0407 361 596 Aust

***BEFORE you BUY – Ask us for a competitive software price BELOW retail – No obligation!

You also get FREE 30 min to assist in setting up your company in the software, and FREE ongoing email or phone support – No-one offers as much!

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

Business Finance 101 – What is the difference between Current and Non-Current Liabilities?

Business Finance 101 – What is the difference between Current and Non-Current Liabilities?

What is the difference between Current and Non-Current Liabilities?

Businesses have liabilities – payments that are to be paid soon or later (long term) they are divided into Current and Non-Current.

Current Liabilities are obligations due to be paid within 12 months or less of the date of a company’s balance sheet and will require the use of a current asset (eg money in bank) or will create another current liability if paid by debt or loan.

Current liabilities are usually listed in the following order:

  1. Credit cards and overdraft accounts, loans less than 12 months;
  2. Accounts payable (trade creditors);
  3. The remaining current liabilities such as payroll taxes payable, superannuation, income taxes payable, interest payable and other accrued expenses.

Often, all the parties who are owed current liabilities are called creditors. In special situations, a legal arrangement may be created that gives preference and then those parties are called secured creditors. The majority of creditors are known as unsecured.

Non-Current Liabilities are liabilities that are to be paid over more than 12 months – typically business or vehicle loans and financing such a Chattel Mortgage. Others include Long Service Leave Accruals, and Directors Loans.

Is the business solvent? One overall method that is used to determine if a business is trading in a solvent manner, is to check if the Current Assets are more than Current Liabilities. The amount of current liabilities is used in financial ratios – such as:

  • Working capital (current assets minus current liabilities) and the company’s;
  • Current ratio (current assets divided by current liabilities).

These give an indication of the company health.

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much! 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

Business Finance 101 – Liability vs debt – What is the difference?

Business Finance 101 – Liability vs debt – What is the difference?

Liability vs debt – What is the difference?

What is the difference between liability and debt? Often, people use liability and debt when they mean the same thing.

For an example, in the debt-to-equity ratio, debt usually means the total amount of liabilities. In this case, debt includes short-term such as overdrafts and credit cards and long-term loans and bonds payable, and normally also includes accrued wages and utilities, income taxes due, and other liabilities.

In other words, sometimes debt is means all obligations…all amounts owed…all liabilities.

However, other times, the word debt is used more narrowly to mean only the formal, written financing contracts such as short-term loans payable, long-term loans payable, and bonds payable – example, hire-purchase, equipment finance, etc.

So look further, to know WHAT is being used – be clear!

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much! 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

Cashflow Tips – Helpful tips for managing your money in your business

Cashflow Tips – Helpful tips for managing your money in your business

Cashflow Tips – Helpful tips for managing your money in your business

Here are some exerts from a great resource for managing the money in your business, at the Queensland Govt site at:

http://www.business.qld.gov.au/business and under the Running a Business then Making and Managing Money –

Managing Cashflow

Your cash flow is the money you have coming in from revenue and going out for expenses. Good cash flow management will ensure you always have money available for paying your expenses when they are due.

Even profitable businesses can fail if cash flow is not managed properly. If you don’t have enough money available to pay your lenders or suppliers, banks may foreclose and suppliers could cut supplies.

There are many areas in your business that can impact on your cash flow. It is important to understand how customer payment terms, supplier payment terms, loan payments, future spending decisions and other items can affect your cash flow.

This guide will help you to manage your cash flow and understand how to use cash flow analysis to inform business decisions.

Plan and Monitor Cashflow

Planning and monitoring your cash flow is one of the most important things you can do when running your business. This should also include how you will address cash shortfalls or surpluses if they occur.

Forecast cash inflows against cash outflows

A cash flow statement will help you forecast your money coming in and going out. Forecasting your cash flow is usually done annually and broken down into monthly amounts. Always record the amount in the month it is expected to be spent or received. For example, electricity is usually paid quarterly so should be recorded in the month it is due.

You can use a cash flow template to forecast your annual cash flow. You will need to estimate and record the following amounts for each month:

  • Total monthly cash inflow – includes sales, sales of assets, capital injections from borrowings or owners funds, interest revenue and any other sources
  • Total monthly cash outflow – includes items such as purchases, loan payments, supplies, telephone, electricity, wages and any other bills
  • Net cash flow – take the total outflows from the total inflows to see if there is more money in or out
  • Opening balance – record your cash available at the beginning of the month
  • Closing balance – calculate your funds available at the end of the month by adding the net cash flow to the opening balance. This will become your opening balance for the next month. Note: If your net cash flow is negative, this amount will be reduced.

Include GST when inserting amounts for some cash inflows (particularly sales) and many cash outflows (particularly purchases). Calculate the difference between total GST inflows and total GST outflows and insert this as GST payments.

Different businesses are subject to differing GST requirements, so you should seek specific advice from your tax adviser. Learn more about working with business advisers.

Monitor actual inflows against outflows

As each month passes it is important to record your actual cash flow. This can be compared against your forecast to see if you are tracking as planned. You may find you need to review and adjust your forecast as amounts change over the year. Always make sure your payments received match invoices issued, and receipts and payments match.

Invest surplus cash or arrange loans

If you forecast excess cash for some months, it can be worth putting it in short-term investments to maximise your income. If you anticipate any shortfalls in cash, you may want to plan to use this invested excess, or seek for an appropriate loan to temporarily cover your costs. Don’t forget to include these extra payments or receipts in your cash flow forecast.

Related links

Watch recorded webinars to learn about financial management: back to basics and financial management: the how to.

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

Business Tips – Focus on your ideal client – Tips on how to define them

Business Tips – Focus on your ideal client – Tips on how to define them

Focus on your ideal client – Tips on how to define them

Like most small business owners, we offer our service or product usually for anyone and everyone, as we need to make sales and ANY sales! But as time passes the value of focusing on a niche area and an ideal client should become your strategy – why? Let me ask – is it better to be Jack of all trades and Master of none?” – Being an expert  means becoming a specialist – only 3-4 products or services, or having staff who are  expert in 1-2 products each which allows you to widen your offer, but still maintain expertise – no-one knows it ALL!

Consider the thoughts of Sandy McDonald in How to know your ideal client. It’s so much more than demographics.

Your ideal client – Embracing the process by which you get to know your ideal client is just so much more than demographics; their age, gender and location. Yes, who are they but what do they most need, what are their problems, how would they solve them without you, how could you better solve them, how can you better serve them?

Fostering that attitude earlier would have been a great lesson for older me. Not that my business wasn’t successful, but riding on the coat tails of an era in which business owners needed my expertise more than I needed their business made the next era a difficult one to navigate…..

Up until then, I’d been asked to do work, I’d done the work and been paid. When my client’s wanted more work, they came back, I didn’t seek them out.

Now we did business in a culture where to know your client, care for and nurture them had become the very essence of a successful business.

The trouble is it’s not innate. You can say ‘know your clients’, but what does that really mean? When I talk to most business owners, they have a generic picture of their clients. They can rarely describe their perfect client. They are vague about the value that a particular client represents in their business.

Sandy goes on to give 5 steps to work toward finding your ideal client and how you would serve them. Read More.

At Entrepreneur, Stephen Sheinbaum presents an interesting approach to find your ideal client is to begin with a study of yourself –

How many times have you said, “My business could get really big if I could just find the right clients”? If you have, you’re not alone: There’s not an entrepreneur that I know who hasn’t had that thought, at least once.

The good news is that there are many ways to find the right clients. Here are five strategies that can be universally adopted to help you find them –

1.     Know who you are – A clear simple elevator pitch that invites interest

2.     Know your competitors – Sometimes you can discover a gap in the market

3.     Do your homework – Read and listen to what the industry is dealing with

4.     Ask – Survey all the time, customers, potential clients, formal surveys

5.     Be seen – Join networking events and chambers, speak when given the chance

Read More.

At Duct Tape Marketing, John Jantsch has 5 steps for business owners who want to grow –

The 5 steps below can put you on the path to discovering your ideal target customer-

1.  Start with the Smallest Market Possible – This may feel counterintuitive to many just starting a business, but you have to find a group of customers that think what you have to offer is special. When you’re just getting started you may have very little to offer and in many cases very few resources with which to make sufficient noise in a market for generic solutions….

2.  Create an Initial Value Hypothesis – In the step above I mentioned the idea of finding a narrow group that finds what you have to offer special. Of course, this implies that you do indeed have something to offer that is special

You must create a “why us” value proposition and use that as you hypothesis for why us. If this is starting to sound a little like science that’s because it is. You must always stay in test and refine mode in order to move forward….

3.  Get reality in Discovery Test Sessions – Established, thriving businesses have the ability to learn a great deal every day from customer interaction. Since start-ups don’t have any customer interaction they have to create ways to test their theories initially and on the fly

The key to both making and affirming your initial assumptions is to set-up what I call Discovery Test Sessions with prospects that might easily fit into your initial smallest market group. These are essentially staged one on one meetings….

4.  Draw an Ideal Customer Sketch – Once you’ve trotted out your hypothesis and tested it with your narrow group, you’ve got to go to work on discovering and defining everything you can about your ideal target group that is making this easier to do than ever.

5.  Add Strategy Model Components – The final step is to apply this new ideal customer approach to other elements of your strategy.

Read the full article HERE

Have you struggled with an ideal client?

I certainly have – and when calls come in I have to decide if they are core to my specialty, or do I know a trusted colleague who has the expertise they need if it is not mine.

What is YOUR experience?

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!