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Canberra Bookkeeping & Business News

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4 Simple Steps To Managing Your Cash Flow

4 Simple Steps To Managing Your Cash Flow

A small business needs to ensure that there is a steady flow of cash by managing accounts, sending invoices to customers, collecting and reconciling payments. If these practices are not regularly followed, it will be difficult for your business to survive. Some businesses do not want to spend money on an external bookkeeper. However, if you are a savvy business owner, you will realise that a bookkeeper is going to be helpful in ensuring that your cash flow is properly managed. Aside from hiring a bookkeeper, it is also important to monitor your financial activity. This way, you will know whether or not you still have enough money to pursue your plans for the future. 

Once you have sorted your bookkeeping, make sure you manage your cash flow:

Plan ahead

You need to save cash for a rainy day. While it is good to hope for the best, it is also important to plan for the worst. This is why you need to anticipate needs by planning accordingly. If you have to pay for your monthly expenses, prepare enough money so you will no longer have to worry about a bill coming out of nowhere. 

Review your financial report

Your bookkeeper takes care of your income and expenses and you will know about your financial performance if you dedicate up to 30 minutes to the bookkeeping task. For you to stay on top of your bookkeeping game, make sure you check if there are problems that you need to properly address. When you have time for reviewing your report on a daily basis, you can prevent any task from piling up.

Encourage customers to pay on time

It is not enough that you send invoices as you also need to make sure that they pay on time. When you encourage timely payments, your monthly expenses do not have to suffer. You can give incentives to customers who make it a habit to make timely payments. This is more effective as compared to chasing late payments. 

Look for cash flow instead of profits

Many businesses have the tendency to focus on profits without realising that it naturally flows. For businesses to continue to survive, managing cash flow effectively is necessary. A business that is profitable does not necessarily mean that it has enough cash flow. You will still have to keep your finances in check. Avoid spending when you know you do not have enough cash to cover your monthly expenses. Monitor the money you spend on lunch meetings and occasional business travels. 

Software as a Service in the Business Environment

Software as a Service in the Business Environment

In today's advanced business technology, Software as a Service (SaaS) is a popular choice. Most companies are using this cloud application for a number of reasons. With SaaS, most of the applications work in the cloud. This is a great advantage for businesses because it improves productivity by providing access to information to people at once. There are no restrictions regardless of your device and location so long as you have Internet connection. 

Living in the digital era also means you do not need a powerful computer to make the most out of SaaS. With your smartphone, laptop or tablet, you can take advantage of SaaS solution. What makes SaaS a smart and efficient business technology? 

1. Reduces time, increases productivity

Installation and configuration are issues often faced by companies during software deployment. The best thing about SaaS is that it is already installed and configured. All the user have to do is to provision the server and within a couple of hours, the application will be ready for use. Since SaaS solution gives users the ability to get access to every bit of information anytime, anywhere, productivity will no longer be affected. Even employees across the globe can still be in the loop when the software solution is used. 

2. Cost-efficient service

Saas is in a multitenant or shared environment. That said, the costs of software and hardware license are low compared with traditional business model. Business owners also have the option to make changes to the environment depending on their needs. This is a viable option for small and medium businesses because the maintenance costs are reduced as well. 

3. Easy to use

A traditional business environment that embraces SaaS solution should not worry about getting used to the advanced business technology. This solution has proof of concepts and users are given the option to test the functionality of the software to ensure a smooth migration. This means that you can test SaaS offerings before you commit to buying them. 

4. Stress-free upgrade

The traditional model may require you to buy an upgrade package and install it right off the bat to get the model to work. Most SaaS providers give you the liberty to enjoy an advanced business environment without having to worry about the upgrade. This is because the effort and costs associated with upgrading the environment is significantly lower than the traditional model. You will no longer have to pay for any services to upgrade the environment.

Costly Mistakes You Make In Managing Your Cash Flow

Costly Mistakes You Make In Managing Your Cash Flow

A robust cash flow is a strong indicator that your business is on the right track. However, cash flow problems are all too common and one of the main reasons some businesses fail. Find out what these cash flow errors are and how they can be avoided. 

Untimely payment of accounts receivables

Accounts receivable is a good sign for businesses because it means that money will come in. Unfortunately, you still have to collect accounts receivable before you can treat it as profit. When expenses arise, you may even end up short. This is the most common cash flow problem that can become a patter if left unsolved. Past-due payments must be collected to prevent cash flow problem. A clear guideline regarding the consequences for late payments must be put in place. You will also need to a clear workflow that will enable you to keep track of invoice issuing and checking customers who not making a payment in a timely manner. 

Unmonitored expenses

No matter how busy you are, you need to take the time to review your expense sheet. Are there any unnecessary expenditures? You will need to trim them as they ruin your monthly budget. Being attentive will can prevent you from committing any costly mistakes. Record-keeping helps you determine whether or not you are overspending. Monitoring your expenses also help ensure that your taxes and debts are paid. 

Miscalculating the cost of business growth

It is not easy to run a business let alone growing it. While growth is a sign that your business is starting to prosper, growth can be expensive and if you do not have a financial management strategy in mind, everything will fall to pieces. Planning in advance ensures that your business will be in the right direction. Operational mismanagement can also hurt your cash flow.If you want to optimise your customer service, make sure you have long term solutions. Avoid spending spree and while a growing company requires extra help, you will still have to keep an eye on your spending habits. Although you want to grow your business, it should continue to operate on minimal expenditures. With this practice, you are guaranteed of a healthy financial state. 

Setting unrealistic expectations

Most businesses believe that receivables come in constantly, and by embracing this concept, many businesses find themselves in serious trouble. While you cannot predict the future of your business, you can still control the direction it will take. There is nothing wrong with being optimistic about growth rates, but make sure these numbers are translating properly. 

Profit vs Cashflow: What Matters Most?

Profit vs Cashflow: What Matters Most?

If you are in business, making a profit is your primary objective. While you may have other motives such as gaining financial independence, choosing who you work with and selecting customers you are going to serve, running a business that produces profits makes a great difference. 

Making Decent Profits

Profits are essential to investing in your business. Expansion and investments will remain a dream if your business is not making a profit. It can be a challenge to maintain a profitable business, but if you want to keep the ball rolling, you need to stay ahead of the game. 

Profits provide you money to purchase assets and repay debts. A savvy business owner knows that you need maintain a steady profit to stay in business. This means hitting the minimum target on a monthly basis. Although profits are achievable, some businesses still struggle because of not pricing products correctly. You are on the right track if you are making sales and covering your expenses at the same time. 

Making decent profits is a sign that your business will last, but cash is also essential. The profits you make do not guarantee a steady flow of income because when there is income, there are also expenses you need to monitor. Cash flow movements are influenced by the payment of expenses, repayments of debt, collection of sales and many more. A cash flow crisis indicates that you are in trouble. Without a steady flow of cash, you will find it difficult to pay suppliers, employees and monthly bills. Meeting your financial obligations will become a challenge for you. If you no longer have cash, it will be impossible for you to stay in business. 

Maintaining Cash Flow

A healthy cash flow means you are able to pay your regular expenses and still have enough bank account balance for expansion. 

More often than not, a gap between receiving your revenue and paying your expenses can be financed by borrowing money from the bank. Considering the fees and interests in borrowing money, this option is expensive and can consume your profits. Business owners who are concerned about their cash flow will see to it that suppliers are paid in a timely manner. A good payment history will save you in difficult times. You can also negotiate payment arrangements and make sure you are true to your promise. 

Profits and cash flow are equally important. At the end of the day, you can go out of business if you do not properly handle your finances. A profitable business with a healthy cash flow can definitely stand the test of time.

3 Principles Of Financial Management For Small Business

3 Principles Of Financial Management For Small Business

Behind a person's accomplishment is a principle that guides you in the right direction. Whether you want to lose weight, ace your exam or get rich, you need to have a solid strategy that will prepare you for the challenges ahead. The same principle applies to being financially successful. You need to have guiding principles to accomplish your goals. For business owners, here are three business principles to live by:

Earn more, spend less

If you are spending more and earning less, it is about time you reassess your spending habits. If you have found yourself drowning in a pool debt, it means that you are not following the basic rule of financial management. Some businesses fail because of not giving importance to cash flow. If your business is generating profits, this does not mean you should not keep track of the money you spend. You also need to maintain a steady flow of cash so you can pay your taxes, monthly bills and suppliers. If you run out of cash, it will be difficult for you to formulate strategies for your business. Even if you want to grow your business, it will be difficult for you to make future plans. 

Invest while you can

Making a wise investment allows your business to survive. Although the idea is easy to understand, it is still hard to do. Business owners grow their business by hiring new people, investing in training and purchasing new equipment. Unfortunately, the lack of cash will stop you from making a progress. You must also keep in mind that generating cash involves having a minimum investment and generating profit as fast as possible. 

Handle your money wisely

It is easy to make hasty decisions about your finances. However, failing to understand where your business stands and where your money is going will make it difficult for you to determine your business performance. It is important to track your income and expenses with your balance sheet. It saves you the headache of guessing whether you still have enough money for future business opportunities. When you make good decisions, you also lower stress levels and make more money. 

Simple financial management principles when followed, are instrumental to growing your business. If you wish to make future investments, handling your finances wisely is the basic rule to follow. A solid plan will prepare you from the challenges ahead so you can accomplish your long term business goals. 

3 Reasons Innovation Is Crucial To Small Business

3 Reasons Innovation Is Crucial To Small Business

If you are a small business owner, you might think that you are not completely affected by the digital evolution that has taken large businesses by storm. As technology changes before a company can completely adapt to it, should small businesses remain complacent? Are advanced business technology only designed for established companies? Many small business owners continue to retain traditional business processes and perhaps, unperturbed to the fact that everyone is affected by digital transformation. 

For one, going digital and having innovative edge ensures survival. Aside from saying goodbye to manual processes, businesses that realise the benefit of digital transformation when it comes to increasing productivity have gained excellent results. It is common for businesses to be in doubt especially when they are treading upon an unfamiliar territory. Everything is new and uncertain. 

Innovation does not necessarily mean stepping out of your comfort zone. Being innovative means that you strive for improvement. Fresh ideas do not necessarily equate to completely transforming a workplace into a digital zone. It only means that you are seeking a better way to keep employees, clients and customers happy. 

What happens when small businesses fail to innovate? 

You can put your company out of business:Change is the only thing constant in this world. Trends that used to be a big hit in the '80s will no longer matter today. You can only thrive if you continue to be innovative. This means you should meet consumer demands. These days, everything is done and completed instantly. Your company should play a major role in making it easy for your customers to transact. Keep in mind that the digital era combines speed and efficiency. Anything that slows down the process can turn your customers off. 

You could fall short on providing products to your customers: Customer satisfaction is essential to ensure survival. How can you guarantee that your customers will remain loyal to your company if you leave plenty of them disappointed because your supply is not enough to provide excellent customer experience? The lack of foresight will only give your customers an opportunity to consider competitors that can provide better products and services without having to worry about limited supply volume. 

You lose your competitive edge: Any game-changing innovation that used to make customers flock just to get their hands on your product or service can become non-existent if competitors continue to innovate. Just because your ideas work does not mean it will continue to dominate the industry in the coming years. You need to continuously innovate because many business predators are willing to go for the kill to stay ahead of the game. 

3 Things To Consider When Choosing Bookkeeping Software

3 Things To Consider When Choosing Bookkeeping Software

Advanced business technology makes day-to-day tasks easier and less monotonous. Keeping receipts in a shoebox becomes a thing of the past because bookkeeping software provides a better way to take care of your bookkeeping tasks. If you intend to view critical business data, all you need to do is to generate reports with the software. It will be easy for accountants and bookkeepers to provide advice and recommendations to business owners as financial reports are always available. 

Since the role of advanced business technology is to supplement some bookkeeping tasks, it is important to know the features that are aligned with your business needs. If you want to reduce repetitive tasks, the software you choose should address these concerns. 

It might be challenging to choose the software that works for you, but checking the feature will help you make the right choice. 

Essential Software Features

Cloud-based technology:These days, it is important for businesses to collaborate with clients and bookkeepers remotely. Bookkeeping software with cloud capabilities will also boost your company's productivity, provide easy access to documents and help you analyse data. If you intend to implement new software, it is necessary that it is cloud-based. 

Capture document: There are numerous ways you can generate receipts, prepare invoices and obtain documents. Since it is difficult to monitor everything including your income and expenses, you need to choose the software with document capture capabilities. Since many business owners considering using their smartphones as a convenient way to extra key information or snap a photo of any essential bookkeeping documents, the software that features a mobile app that can upload essential information anytime, anywhere and on any device. 

Integration with accounting software of choice

Since many small businesses use advanced software such as Quickbooks, it is essential that the software you choose must have the ability to integrate with the software of your choice. 

When efficient bookkeeping software is implemented, you will be assured that you will generate accurate financial report that you can easily interpret. It will also be easier for you to know where your business is going as you are aware of your financial health. Although virtual bookkeepers or bookkeeping software may require business owners to step out of their comfort zone, considering the absence of face-to-face interaction, advanced business technology is indeed beneficial because it provides a faster way to get things done. Bookkeeping software also checks and balances everything that has to do with your income and expenses, so it will be easier for you to keep your business on its feet. 

3 Small Changes That Keep Your Financial Health In Check

3 Small Changes That Keep Your Financial Health In Check

For people who are not a fan of numbers, bookkeeping can be a daunting task. Taking bookkeeping for granted does not come as a surprise for business owners who do not have a proper bookkeeping system in place. Bookkeeping may only be a tiny fraction of your business, but it creates a serious impact on your financial when it is habitually ignored. Surprisingly, it does not take rocket science, but only some simple habits to ensure your financial health stays intact. 

1. Monitor your business expenses

It is easy to lose track of the money you are spending when you think that they will not seriously affect your cash flow. However, special events, travels and even lunches can accumulate. If you are going to check your tax records, you may be wondering why you have zero balance when you are only spending a minimal amount. Audit your expenses so you will know whether or not you are overspending. Aside from keeping financial details, you will also have to prepare audit. Making this a habit will ensure that you are not going to miss out any essential information. You will also have peace of mind as you know where money is spent. 

2. Put aside money for taxes

Delayed tax payment can result in incurring interest and penalties. Constant delays can affect your cash flow and instead of allocating money for paying your monthly bills, you end up using the money for penalties. The plan of expand your business needs to take a backseat as you need to prioritise tax payments. A simple neglect of tax payments can definitely hurt your business. Setting aside money for taxes can save you from these inconveniences and avoid paying unnecessary penalties. 

3. Track your invoices

As your business grows, you will need to monitor your clients including payments made and missed payments. Identifying the clients who have already made a payment and those who have not can be challenging without a bookkeeping system. When monitoring your invoices, make sure you have bookkeeping software that will be able to generate invoices and provide information of clients who have not yet made a payment. 

How To Set Up A Business In Australia?

How To Set Up A Business In Australia?

Setting up a business is not an easy decision to make. You need to be well-prepared for the challenges ahead and make sure that you can meet the demands and stay focused despite the distractions. If you have been dreaming to become a successful business owner, you need to comply with the requirements involved in product development, marketing, finance and many others. Your business will not be in operation if you still lack the basic but essential requirements. 

1. Know your business structure

It can be pretty exciting to toy with the idea of putting up a business, but behind the aesthetics are processes that you may not be prepared to face. The first step to starting a business is determining your business structure. It is vital to know the kind of structure that suits you and find out the advantages of each so you will know how you are going to manage your business. Do you prefer to be a sole trader or be in a partnership? 

2. Register your business

You will also need to business name to give your company an identity. It is also important to note that having a business name is not enough as you need to get it registered. You might run the risk of sharing the same name with another business. Registration should take precedence over creating business cards, websites, business cards and logos. The Australian Securities and Investments Commission (ASIC) still has to accept your business name prior to using it. Aside from your business name, you will also have to registered your logo as a trademark. 

3. Get an ABN

An Australian Business Number (ABN) is essential to businesses that are registered to collect GST. The number can be secured from the website of Australian Business Register. Aside from ABN, you will also secure a Tax File Number (TFN) from the ATO if you are in a partnership. 

4. Familiarise PAYG payments

All employees must make PAYG payments and as a business owner, you need to know the taxable amounts deducted from your employees' salaries. You will also need your accountant's advice when it comes to meeting your tax obligations. 

5. Secure licenses, permits 

Permits and licenses are important for your business to be in operation. It is also imperative that you check ATO's website so you will have an idea about your eligibility for fuel tax credits. It will also be helpful if you familiarise yourself with consumer and privacy laws as they are also part of your legal responsibilities in setting up a business. 

4 Bad Habits That Can Destroy Your Business

4 Bad Habits That Can Destroy Your Business

Do you know the reason why some businesses fail? A simple neglect of your financial report can mean a lot especially if it becomes habitual. Imagine being complacent with your business performance when in truth, it is going haywire. A business owner can overlook serious problems such as insufficient cash flow when a financial report is unavailable. Each month, your financial health can get affected by unpaid bills, unrecorded expenses and many more. Aside from which, here are 5 bad habits that can expose your business to greater financial risk:

Not planning ahead

If only business owners could predict the future, hiring a bookkeeper or accountant will not be necessary. However, this is not the case. You need to keep your income and expenses in check to ensure you are still on the right track. Whether it is a short-term or long-term plan, you need to create one so you can prepare yourself for whatever challenges that come your way. A concrete plan ensures that you will be able to stay in the game. Without a plan, you will never know which direction your business will take. 

Not creating long-term goals when investing

They say that higher risks have greater rewards. While this may ring true, you still need to have long-term goals when investing because this is a serious matter that can result in a plethora of financial problems if you do not consult experts. Investing involves sound decision-making. If things did not go as planned, do you have a better plan to leverage your business? 

Not getting the advice of professionals

Consulting an expert is essential to obtaining financial security. Even if you are a small business owner, you need to hire people that will help you grow your company. Your financial goals will not be accomplished if you do not get the best advice from experts.

Not tracking your budget

Even if your business is profitable, this does not give you peace of mind unless you have enough cash flow to pay the bills and cover monthly expenses. When tracking your expenses and budget, you need to keep receipts so you will know the amount you are spending whether the money is intended for buying office supplies or for travel. When you monitor your expenses, it is easy for you to find out if you still have money to spend. Once you know how much you are earning, it will be much easier for you to rethink your spending habits. Hiring a bookkeeper will also help you get access to your financial statement regularly. Having access to your financial report will also help you identify your financial health. 

5 Good Bookkeeping Habits Business Owners Can Adopt

5 Good Bookkeeping Habits Business Owners Can Adopt

A business owner is often faced with a myriad of business-related problems because of bad bookkeeping. Although bookkeeping is only a tiny fraction of business management, failing to track your expenses can result in costly disaster. Businesses that continue to survive and thrive have a good bookkeeping system in place. If your bookkeeping task is in chaos, here are some habits you can adopt to improve your bookkeeping system. 

1. Purchase the right software

Traditional bookkeeping takes a large chunk of your time as you need to be focused on manual processes. With bookkeeping software, you will be able to reduce manual tasks and streamline processes. While there are are many bookkeeping systems for you to choose from, not all of them meets your needs. When searching for bookkeeping software, always take your business needs into consideration. 

2. Give importance to expense receipts

Monitoring how much you are spending on your business will help you keep your cash flow intact. Purchasing office supplies, paying your monthly bills and traveling for business purposes are part and parcel of managing a business. However, not keeping track of these expenses can have a negative impact on your cash flow. You may think you still have enough money to take care of your monthly bills, but since you have not done any regular monitoring, you realised that you no longer have cash left. Keeping expense receipts enables you to know the amount you are spending. 

3. Get professional help when preparing tax returns

Tax time can be stressful to most business owners especially to those who resort to DIY bookkeeping. However, there are still ways you can make the process less challenging such as hiring a professional to help you get the job done. Preparing tax returns require accuracy to prevent an audit from ATO. Make sure you leave the job to a bookkeeping professional.

4. Do not go completely "hands-off"

A business owner might think that outsourcing a bookkeeping professional takes care of the task and there is no need to check reports and other essential information. Wrong. As an entrepreneur, it is still important to know your financial health and business performance. This way, you will have an idea whether or not it is time to grow your business. Having a basic understanding of bookkeeping and accounting will keep you on the right track. 

5. Track your receivables

Monitoring clients who have not made a payment is not an easy task because you need to classify your invoices to prevent them from mixing up. Tracking receivables will be made much easier with the help of bookkeeping software. It enables you to classify invoices so you will know which ones are unpaid or late. 

Have You Obtained The Benefits Of Cloud Technology?

Have You Obtained The Benefits Of Cloud Technology?

Bookkeeping is important to every business no matter the size. Without bookkeeping, your business can be in chaos as you do not have a dependable person to help you track your income and expenses. In the past, it takes hours before you can get your bookkeeping tasks done. Since it is time-consuming, it is not often prioritised. These days, there are easier ways you can take care of your bookkeeping tasks such as switching over to cloud technology. It might sound like a promising break-through, but it does more than just reducing manual tasks. Cloud-based software also enables businesses to increase productivity so you can take care of all of your business obligations. 

1. Real-time reports are generated

If you are going to rely on paper-based reports, it may take days or even weeks before you can get the report. Also, if there are errors on the report, you need to coordinate with your bookkeeper to correct discrepancies. Cloud-based software bypasses these processes by giving you instant access to the information you need. As a result, you can collaborate with your bookkeeper or accountant and get some recommendations whenever necessary. 

2. Online invoicing 

Generating invoice is not easy for those who still do it manually. You will need help from the software so you can switching to online invoicing. With this, you will be able to know the customers and clients who still owe you money. It makes it easier for you to track down late payers because you will receive notification once customers or clients view your invoice. 

3. Reports are accessible

Cloud technology offers mobility so you can view reports anywhere at anytime and on any device. Even if you are out for lunch, the reports sent to you can be viewed instantly. You do not have to be in front of your laptop to do this, thanks to the flexibility of cloud-based software. Aside from reading financial reports, you can also track expenses, check balances and many others. 

4. Everyone can collaborate

Physical presences is no longer required if you want to conduct a meeting with your employees to discuss your business plans in the future. Cloud technology provides multi-user access so it will be easy for you to work with your bookkeeper and accountant. You will no longer have to keep on guessing about your business performance and financial health of your business because cloud technology gives you the information you need. 

The Benefits Of Good Bookkeeping

The Benefits Of Good Bookkeeping

Operating a small business is not an excuse to ignore bookkeeping services because in the long run, you will need to grow your business and having a bookkeeping professional you can rely on will give you peace of mind and help you assess your business performance. If you have not considered hiring a bookkeeper yet, here are the benefits you can reap from having a professional take care of your  books. 

1. Handle payroll easily

Payroll management is time-consuming because it demands accuracy. Incorrect deductions and payments can trigger ATO and may even call your attention so you can give some explanation for the wrong entry. Only a knowledgeable person can put a systematic process in place so you will have nothing to worry about during tax time. A reliable bookkeeper will help you check deductions and payments. Any irregularities will also be addressed before it creates bookkeeping chaos. 

2. Timely bill payments

Delays in paying the bills can be frustrating especially when you do not get regular reminders for bills that are due. While you may not always pay complete attention to your monthly bills because of other obligations, this does not mean you should set your payment obligation aside. In your absence, a bookkeeper will help you make timely payments so you will not shoulder late fees and penalties. Your bookkeeper will also constantly remind you when your payment is due. 

3. Generate reports in real time

Financial reports tell you how your business is doing. It provides you an overview whether or not you should grow your business. It is also where investors, creditors and supplier base their decision. If financial reports are not generated in a timely manner, it will be difficult for you to find out if it is time to expand your business. Your bookkeeper will give you access to updated reports on a regular basis so you do not have to keep on guessing about your financial standing.

4. Prevent interest payments

When it comes to operating your business, bank reconciliation must not be set aside because it is as equally important as other aspects of your business. Bookkeeping professionals will make sure that you prevent any additional interest payment by handling your accounts payable and accounts receivable. This way, you will know what you real balance is. If you have a bookkeeper to take care of this task, making additional interest payments will be a problem of the past. 

Reasons Poor Bookkeeping Should Not Be Ignored

Reasons Poor Bookkeeping Should Not Be Ignored

Bookkeeping is an essential task of every business because even when a company is profitable, it is also important to keep your cash flow in check. There are bad bookkeeping practices that can hurt your business especially when there is lack of proper record-keeping. If you still do not give importance to bookkeeping, here are some reasons you should pay attention to it. 

Missed Opportunities

Bookkeeping enables you to take your business in a more positive direction such as expanding your business. However, when you fail to pay attention to bookkeeping, you will have to prioritise other obligations such as reducing debt as you do not have enough money for business growth. 

Late Payments

Paying your debts late is often due to poor bookkeeping. Instead of using your money for other more important things such as paying your vendors and suppliers, the money is spent on interest rates. You will also have to suffer the loss of credit and less favorable payment terms set by suppliers and vendors. This is because late payments can affect your credit reports and scores. It is important to keep accurate records so you will know if you have enough cash flow to pay your bills. 

Decreased Sales and Profits

You can lose access to suppliers and vendors if you fail to make timely payments. The same is true when you pay the wrong amounts or miss payments. When you do not have the things you need to offer your goods or services, you will also lose sales and customers will not wait until the goods become available. They will look for another company that will be able to fill their needs. 

Legal Problems

You may underestimate the negative effects of bad bookkeeping, but it can also lead to legal problems in the long run. If you have unpaid or late taxes and improper deductions, your company might be sued for these costly mistakes. It is essential for a bookkeeper to be well-versed with tax policies so they can properly handle sales, payroll and income taxes. Tax experts will also be able to deduct expenses correctly.

Inaccurate Financial Reports

You will know how your business is performing if you have accurate financial reports because this is where you check your budgets, cash flow, balance sheets, receivables and payables. If you do not have accurate bookkeeping, you will not be able to run your business efficiently. Your financial reports will also help you check and address any discrepancies that can create a snowball effect on your business. 

5 Important Tools To Make Bookkeeping A Breeze

5 Important Tools To Make Bookkeeping A Breeze

Bookkeeping can be a bane to business owners if proper system is not put in place. While you are trying to keep up with bookkeeping, other tasks can distract you and may even be reasons for you to forget about bookkeeping unless you are already reminded by your late tax payments. Late fees and penalties can hurt your business especially if it happens frequently. Since bookkeeping is an essential task, you need 5 important tools so ensure a stress-free bookkeeping process. 

1. Smartphone/mobile device

Technology offers flexibility to business owners by making traditional bookkeeping a thing of the past. Today, it is easier to manage your bookkeeping files in just a few taps. Gone are the days when mobile phones are only intended for texting or calling. Technology has brought business management to the next level by making it easier for business owners to check information, delegate task and even conduct a regular meeting. The best thing about smartphones is that it breaks the cliche of 9 to 5 jobs. You can collaborate even without being physically present. 

2. ATO website

Have you ever wondered about the deadline for filing tax returns? ATO's website is going to be your friend as it provides information you need to ensure you do not miss the deadline. It provides online forms, tips, instructions and other important reminders so you prevent incurring late fees. It is your one-stop shop for your bookkeeping needs. You can also utilise its online tools such as the tax calculator, which enables you to find out about the amount you are going to pay come tax time. 

3. Google Drive

Everyone prefers to store files in the cloud instead of using desktop programs. This is because it is convenient and flexible. With cloud storage such as Google Drive or Dropbox, it will be easier for you to access financial report anytime, anywhere and even on any device. With this ability to access important information, you can review income statements and balance sheets in real time. The cloud storage also allows you to back up your data safely. 

4. Project Management Software

Location often restricts workers from collaborating. With project management software, you will be able to brainstorm with your workers without being in the same location. The software allows you to keep things organised so you will have the ability to track the amount of work you have done. 

5. Bookkeeping software

Bookkeeping software programs such as Xero makes it easier to track your financial report and even minimise fraud. Every transaction can be traced through transaction history so you will be able to know if a financial statement has been altered before you lose vast amount of cash. 

Is Your Business Threatened By Automation?

Is Your Business Threatened By Automation?

Automation is considered a buzzword in the digital age. Many businesses are viewing it as an innovative way to get things done. As large businesses continue to open their doors to technological evolution, small businesses are seemingly in doubt of what is in store for them. Most of these businesses are not yet ready to embrace digital transformation. The clouds of doubts and fears are hindering SMBs from moving forward. The million dollar question is: Should small businesses be threatened by automation? 

To find out whether automation is boon or bane, let us look at how things were done in the past decades when Internet was not yet in the picture. Everyone saw that big corporate lump, dragging workers to the desk of doom: the manual tasks. As businesses searched for strategies to survive in the concrete jungle, the era of paperwork brought burden, making it hard for employees to carry out each task. Managing payroll was not easy for bookkeepers as they need to ensure accuracy, or sometimes numerical precision. 

In the past, reducing manual tasks was as tough as defying gravity. You had to be chained to your desk to finish the task. If you had to review your reports, this would mean coordinating with your bookkeepers and accountants. If there were discrepancies in the information, you must start from scratch by reviewing the process. You cannot enjoy the freedom of flexibility in the era of paperwork. 

Now comes the age of paperless. Everything can be done in an instant sans the error. It makes life complicated and stress-free. Imagine reviewing your financial statement while dealing with other business endeavors. If you want additional information, you will simply ask your bookkeeper to communicate with you via collaboration tools. The best part is your bookkeeper is a thousand miles away from your location and yet this factor does not affect the way you do business. 

And yes, the manual task! Everyone dreads sitting for hours just to get out of an intricate maze of bookkeeping. This is something one would most likely fear because it can be a sick cycle as you go around in circles. Automation reduces your workload without running the risk of compromising quality. What you used to tackle in days can be done in minutes. Speed is coupled with accuracy to ensure employee and customer satisfaction. 

For small businesses that have not yet realised the potential of automation in making day to day business obligations easy, fast and convenient, now is the time to give automation a chance to streamline processes. 

Why You Need To Automate Your Bookkeeping Processes?

Why You Need To Automate Your Bookkeeping Processes?

Manual processes consume most of your time because you need to ensure that the information is correct and accurate. However, many businesses do not have enough time to focus on bookkeeping tasks that it often ends up taking a backseat. If you do not give priority to your bookkeeping task, you will face a number of problems such as falling behind your tax payments. Penalties due to late payments can hurt your business. There are many ways you can automate your bookkeeping processes with cloud technology. Automation allows you to spend less time on bookkeeping tasks without running the risk of exposing sensitive information to errors, data breaches and intrusion. 

Reasons You Need To Automate Your Business

1. It streamlines business processes. 

Have you ever been stuck in one particular task because your company is still keeping manual processes? Some bookkeeping tasks require you to dedicate additional time and effort to ensure that the data is correct and free of errors. With cloud technology, you will be able to make this objective possible as it simplifies your workplace by providing advanced solutions making staff management a breeze. 

2. Collaborating with workers will be easier. 

In the past, you need to be chained to your desk to collaborate with your team. Automating processes with cloud technology will make it possible for you to collaborate without necessarily requiring the physical presence of your workers. Whether they are from a different location or using a different device, it will never be possible to brainstorm. You will also know the task's progress and coordinate with your team if some strategies are not working. 

3. Reviewing expense reports can be done in real time. 

The problem with paper statement is that you have to wait for your bookkeeper to submit the report before you go over the information. Automation makes it easy for you to review your expense reports so you will be able to identify whether or not your business is doing well. In turn, you will be able to plan ahead and grow your business. 

4. You can prevent fraud before it affects your business. 

Fraudulent activities can go unnoticed if you do not have a system to track activities in real time. Having access to your financial information will make it easier for you to spot irregularities before they can wreck havoc on your business. With cloud technology, keeping up with your bookkeeping records will never be a challenge.

5 Ways Bookkeeping Can Hurt Your Business

5 Ways Bookkeeping Can Hurt Your Business

The only time bookkeeping gets major attention is when something goes wrong. As stressful as it may seem, bookkeeping is an integral part of your business. Habitually ignoring invoicing, record-keeping and other bookkeeping-related tasks can hurt your business. Costly disaster occurs when you do not pay regular attention to your business. There are five ways bad bookkeeping can hurt your business. 

1. Losing Receipts For Small Transactions

Although keeping receipts may not seem like an essential bookkeeping task, you can meticulously track your expenses by keeping receipts even for small transactions. If you generate financial reports, it will be easier to track transactions and find out where your money went when your receipts are intact. 

2. Not Keeping An Accurate Financial Report

If your business is doing well, you may find it redundant to review your financial report. However, there are sudden changes in the business industry that can take a toll on your business. Due to the lack of knowledge, it is already too late to discover that your business is going haywire. Even if you are on the right track, you still need to be on top of everything by making sure that the financial aspect of your business is up to date. 

3. Failing To Categorise Expenses

You might think that your expenses are one and the same regardless where you are spending them on. This is one mistake that can ruin your business especially when the time comes that you need to generate your financial report. Your bookkeepers should make it a point to update your records by categorising your expenses. This way, you will be able to know how you are spending your money. 

4. Treating All Expenses As Immediate Expenses

Your office supply expenses should not be necessarily booked as immediate expenses. You should know the difference if you want to avoid ruining your business. You should be aware of the items you are spending your money on. 

5. Ignoring Books Reconciliation

Bank reconciliation is one of the most ignored tasks that have a negative impact on your business. Fraudulent activities go unnoticed because of leaving confidential data open. The only to check irregularities and discrepancies is when you reconcile books every month. 

While these bookkeeping tasks may seem minor to small business owners, ignoring them can have a serious effect on your business. Since your cash flow is the lifeblood of your business, it is  imperative to keep track of your expenses. 

These New Year Bookkeeping Habits Need To Be Part Of Your Business

These New Year Bookkeeping Habits Need To Be Part Of Your Business

Have you already identified your business’ areas for improvement? If you haven’t yet, now is the best time to make an assessment especially on the financial aspect of your business. Even though your business is generating profits, losing money is still inevitable if you do not keep your finances in check. As a small business owner, you need to pay serious attention to all aspects of your business including the financial aspect.

1.    Use bookkeeping software that meets the needs of your business

<p>These days, you can choose from a wide range of software that can carry out daily business tasks efficiently. However, you should avoid choosing the first one that you come across as it might have features that you are unable to use. The product should coincide with the needs of your business and help you achieve daily goals consistently. You can ask your bookkeeping professional for advice on the software that works for you.

2.    Choose a professional bookkeeper

A bookkeeper plays an important role in your business and you will realize their importance once you need assistance with various aspects of your business such as GST registration, business structure, obtaining an ABN and many more. It is recommended you visit your bookkeeper regularly and avoid waiting until the end of financial year to get advice. A regular visit can help you determine problems and address issues before they take a toll on your business.

3.    Separate your personal and business finances

It is easy to get tempted with combining your business accounts with your personal accounts but mixing both transactions can spell trouble in the long run. As a result, you will have a messy bookkeeping. Make sure you open a business bank account, which is intended for business transactions only. You should also have a separate personal savings accounts and credits that you will use for personal spending.

4.    Keep receipts and other similar data for your record keeping

It is best to keep your data for a minimum of 5 years as the ATO requires so you can keep track of your transactions. However, you should also keep in mind that five years of data can also bring so much confusion as they can add up over time. Instead of keeping them in boxes, you should more your data online so you can retrieve them easily when needed. Not only will you save on storage space, but enter data efficiently. It is also practical to go paperless in terms of bookkeeping so you can access data everywhere.  These days, you can choose from a wide range of storage apps such as Google Drive.

5.    Observe timely tax payments

If you used to fall behind your tax payment schedules because of unavailable funds, make sure you set aside funds for paying tax in the coming year. This is an important aspect that you need to pay attention to when running your business. Make sure you know where tax payments are due so you won’t catch yourself in a mad panic as the due date approaches. It is best to open another bank account which you will only use for paying taxes. It can help you make timely payments and manage your cash flow.

The Reasons Oral Advice Documentation Is Essential

The Reasons Oral Advice Documentation Is Essential

Once oral advice is given by an expert and based on professional standards, it is easy to overlook one most important thing: documentation. You may not appreciate its importance today, but you will in the future especially if you are already dealing with professional liability claim.

Everything must be put in writing otherwise, defense will be considered weak. In fact, there are many cases regarding the failure to document oral advice and it resulted to a costly mistake. It does seem very trivial if you don’t dig deeper into it but once you are put in a situation where you need to present strong evidence that the discussion between you and the consultant really took place, the documentation will definitely suffice.

What are the key items that should be present in your documentation?

For general questions, documentation consists of basic notes will do. However, the key items or elements must still be present in this documentation. The first item that must be included in the documentation is the date that the discussion happened. This is one of the most important things that should not be overlooked along with the name of the participants.

Aside from the name and date, the facts, advice and recommendations must also be present. If there are tax or accounting considerations, it must be included as well. If the advisor or consultant requested a follow up from client, it must be put in writing as well.

What about unsolicited advice?

When it comes to client’s business operations, unsolicited advice may be considered necessary especially if it will make room for the improvement of the company’s work flow and enhancement of the system. This usually falls under general advice and the discussion will only be documented in firm working papers.

However, for more serious matters, especially if the advice will create a huge impact on client operation, the documentation must be accurate and concise. The key elements should not be forgotten because if there are some allegations against the consultant, the documentation is going to be instrumental.

Consulting Engagements And Its Special Considerations

If extensive discussions between the consultant, client and third parties took place, all of the essential information must be notated. However, the client or the consultant must keep in mind that the advice should be treated with confidentiality and should not be shared to a third party as there may be a tendency that the third party will claim reliance on the information that was provided.

The working papers must have the documentations of the discussions, the parties involved and the date it was held. Confirming the oral advice in a written report must not also be forgotten.

Documenting oral advice must not be taken lightly especially if it will impact client operation. The damage will be irreparable if you allow oral advice to go undocumented. Just imagine the chaos it will bring if you failed to document important advice. When disputes are taken to court, the advisors will be pay such a high price for their negligence to document the advice. Even if advisors or consultants have claimed they provided advice to the client, the statement will not be acknowledged unless the documentation is presented.



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