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.

Tamara Deterding

Written by : Tamara Deterding