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Canberra Bookkeeping & Business News

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Keep Your Cash Flow Intact This Holiday Season

Keep Your Cash Flow Intact This Holiday Season

The Christmas and New Year are the best times to set new business goals for 2016, but you can instantly burst your bubble once you discover that your cash flow has also taken a holiday and there is no way you can materialise your business plans. Yes, cash flow is as equally important as other aspects of your business. Delayed payment collection process is one of the debilitating circumstances that can hurt your business in more ways than one. You can take a holiday all you want this Christmas, but knowing you have unsteady cash flow is enough to cloud your head with worries.

More likely than not, trade payments slow down during and after Christmas and New Year. Usually, payments are made in January, but since there are fixed business costs that need to be paid regularly, your business is most likely to suffer and your plans for the New Year will be completely forgotten due to financial constraint. When your cash flow also takes a holiday, it can be a bad start for your business. A slower cash flow does not stop your daily expenses from piling up. In fact, your business can face a cash flow shortfall if you have not paid much attention to the payments or lack thereof. 

Mindful strategies can get your business going and here are some ways you can survive:

Create a plan to profit: If you have not reviewed your cash flow experience of previous years, it is time you start doing it because preparing ahead of time can reduce the possibilities of cash flow issues especially during the holiday season. You need to prepare for the duration and size of the slowdown so you can still stick to your New Year plans.

Give priority to collections: Make sure you issue invoices promptly and send payment reminders, overdue notices and follow-up calls for overdue payments. This way, you can track your cashflow and avoid facing problems before the holiday kicks in.

Put stocks to better use: Christmas may give you a hard time controlling inventory levels, but there are ways you can still use unsold stocks such as selling off older stocks cheaply. This way, you can free up the cash intended for your on-going expenses.

Review your terms: The holiday is also the best time to assess your payment terms. Offer early payment discounts so you continue to improve seasonal cash flow. If there are large orders you can also negotiate full or part payments ahead of time. Try negotiating extended credit terms with your existing suppliers as well.

Put away some cash reserves: Learn to survive the holiday season by putting away some cash into a savings account with high interest as this allows you to gain flexibility when dealing with your finances. You can also consult with a professional debtor so you will know what your options are.

Christmas can bring a lot of challenges to business owners, but there are still ways to take care of your cashflow without breaking your business plans for the New Year. You just need to have mindful strategies so you can start the year strong.

Smart Tips That Business Owners Can Benefit From

Smart Tips That Business Owners Can Benefit From

Do you know the difference that keeping a financial system for your business makes? One of its major advantages is to help entrepreneurs avoid costly mistakes caused by just overlooking a single financial activity. Your business expenses must not be taken lightly if you don’t want to put it at great risk. A financial system should not be considered trivial because aside from being a time-saver, it can also help you develop a habit of ensuring timely payments.

Processes and systems play a crucial role in your business especially when you have so many tasks to attend to. It is easy to be off the track when you have some other things in mind. However, if you know how to handle your business’ financial aspect wisely, a steady flow of money will continue and you are less likely to face a major problem with the Australian Taxation Office.

Five bookkeeping tips entrepreneurs should consider:

1. Keep your invoices.

Pros: You make timely payments and prevent hurting your cash flow, which happens when you fail to pay the bills on time.

Process: Appoint someone for this bookkeeping task and make sure they know the process for issuing a second invoice, following up on the process through a phone call and checking if your business has incurred any penalties or extra fees for late payments. Once you send the invoice, make sure you have not fallen behind your payment schedule. The invoice does not give you a guarantee that penalties and other extra fees will not be imposed.

2. Put a portion of your money for paying taxes.

Pros: You encourage timely filing of tax returns and avoid penalties for late payments.

Process: Mark your calendar so you will know when your payment due date approaches. Make sure you set aside money so the payment will be settled on or before the due date.

3. Make sure deposits are recorded correctly.

Pros: You prevent out of the pocket business expenses especially when it comes to paying taxes.

Process: You can keep track of your financial activities with the use of a system. It can be a notebook or more advanced bookkeeping software. Regardless of the methods you use, make sure it does not defeat the purpose of keeping a correct record of your deposits. See to it that the deposits are only intended for your income. Depositing your personal savings, loans and revenue from sales into one bank account may cause costly errors in the end as you might confuse your deposits as part of your income.

4. Monitor expenses.

Pros: You are well-aware of your financial activity and it is easy for you to track legitimate expenses.

Process: Business expenses must be monitored closely and make sure you categorize your expenses. If you have just gone on a business trip, don’t forget to write down all of your expenses including lunches, air fare and other business events.

5. Create a plan for major expenses.

Pros: It helps you analyze your budget for future business plans and avoid overspending.

Process: For business improvements to be materialized, see to it that you plan ahead so you will know how much you are going to spend on it. Some business owners end up taking out a loan because of the failure to plan their major expenses. Even businesses have their ups and downs but you can still do something about it by keeping your company financially secure even when major improvements have to be done.

6 Reasons You Should Not Create Any Room For Bad Bookkeeping

6 Reasons You Should Not Create Any Room For Bad Bookkeeping

Managing your business takes skills that only a few businessmen could master. Perhaps, you have already been venturing into a type of business where you need to be keen on your finances. Without a doubt, bookkeeping is the heart and soul of your business. It is not just a task you need to complete so you can fulfil your tax obligations. In fact, keeping an eye on your financial records can save you from being dragged into a potential lawsuit. Some businessmen can be so careless that they pay little attention to the business' important aspect. 

If you have already developed the habit of putting all of your business' financial records in one chequebook, being confused will never come as a surprise. It can be a huge problem in the end, but if you see to it that your business transactions are properly sorted and recorded, you can easily track if something in your business process is not right. 

Reasons To Master Your Business' Bookkeeping Skills:

Provides better records. 

When you consider separate banking and ensure that the money intended for your business is not spent for your personal expenses, you will begin to notice that your bookkeeping procedures have also improved in the long run. As a result, you will be able to provide better records, which can create a positive impact on your tax return. 

Creates corporate veil.

If you intend to form a new corporation, one of the best practices you need to follow, especially when managing a small business is to create a separate chequebook.  This practice helps you identify that bookkeeping is your business's distinct entity and you avoid confusing your business funds for your personal funds. 

Signs Of Business Fraud And Ways To Prevent Them

Small business owners consider embezzlement prevention as a challenge because fraudulent transactions are difficult to detect. Missing cash balances cannot be easily noticed until the amount has been recorded. Even blank cheques and fake invoices are proof that something fishy is going on, and both small and big businesses can fall victim to fraud. It can even go as far as inventing fake vendors on invoices so cheques can be issued to themselves. This is by far the most common way an employees steals from the company.

The transaction raises a red flag once you discover that the bank statement is in somebody else's name. Unfortunately, it is already too late to put a lid on the transaction as it has already been made.

There is a fine line that separates incompetence from fraud. This is why it is hard to conclude that the transaction that took place was indeed fraudulent unless it has been done habitually. For instance incorrect entries may appear as though the bookkeeper has been changing information, but at the end of the day you will realise that the bookkeeper just did not know the correct process. It is essential to know the telltale signs before jumping into conclusion.

Signs of fraud

If a bookkeeper is having trouble matching accounts payable and accounts receivable to your balance sheet, you may need to review the information on the report. You will be given many reasons why the report has not yet been updated. In fact, a bookkeeper may tell you that the reason for not providing an updated balance sheet is because of faulty bookkeeping software. This leads to running a report manually. When reports are generated manually, the process will take longer than usual and the information can be altered. Bookkeepers will also blame the software for failing to reconcile a bank account. These excuses should be a cause for alarm and you need to act on it by regularly monitoring business transactions.

Preventing Fraud

Although you cannot easily detect or prevent fraud, there are ways you can prevent them and one of which is by giving bookkeepers deadline for running a report. Reports must be ready after month-end and you should review them monthly.

It is also necessary to assign a different person for enter the bills and paying the bills. You can monitor where the money is being spent if you ask employees to attach cheques to the invoices. You must also sign your own cheques. Physical inventory also helps you check if there are suspicious transaction taking place. Your employees have to know you are monitoring every transaction.

Automation Helps Business Owners Avoid These Bookkeeping Mistakes

Many small businesses fail because of poor financial health, linked to inefficiency in bookkeeping and accounting.

For small businesses to thrive, budgets must be tightly rationed and this will only take place if bookkeepers are keen on monitoring the financial activity of your business. You might have already heard of modern bookkeeping, which involves automation. Some small business owners still shy away from the idea of automating bookkeeping tasks because it has been thought to be intended for large companies only.

Automation is for everyone. It reduces manual tasks and minimises dependency on skilled manpower. Embracing automation helps you avoid these bookkeeping mistakes:

1. Delayed account reconciliation

Reconciling your books with the bank must be done on a regular basis and in a timely manner. Delayed account reconciliation can become a prelude to larger bookkeeping mistakes. Automation enables you to reconcile accounts easily and highlight discrepancies before bigger problems arise.

2. Failure to track expenses diligently

Your cash flow is the lifeblood of your business. Every transaction must be tracked regularly so you will know how much you are earning and spending. Automation ensures all expenses are tracked.

3. Fraud

Human interaction increases the chances of committing fraud and this is what automation is capable of reducing. Since losses due to fraud can create a huge impact on the profitability of your business, automation will reduce the dependency of your business on human beings and the opportunity to commit fraud will also be reduced.

4. Inappropriate deductions

Not deducting sales tax from a sale is a mistake bookkeeping professionals often commit. This is a costly mistake because not deducting sales tax will display a higher amount of sales.

5. DIY bookkeeping

Another reason automation is critical to business processes is when you prefer to perform bookkeeping task yourself instead of hiring a professional bookkeeper to do it for you. Automation can assist you in ensuring that all of your business expenses are tracked and books are updated regularly.

6. Losing track of the money withdrawn

Businesses maintain a petty cash reserve in preparation for minor expenses. However, you can easily lose track of the money you withdrawn from this reserve, thinking that it will not really affect your cash flow. Running a business means keeping track of cash flowing in and out of your business. If you consider automated bookkeeping, you can easily keep track of these expenses and update your records regularly.

3 Benefits Of Moving To The Cloud

If you are a small-business owner embracing traditional bookkeeping for years, adopting cloud technology is like treading upon a very unfamiliar territory. However, like a man setting foot on a new place for the first time, you need a compass to prevent being lost.

Cloud technology may not be something you can learn overnight, but migrating to this technology can give you more benefits than you know. In the past, bookkeepers have to spend hours managing invoices, receipts and bills. With a vast range of organisation tools and technologies you can use today, you can reduce the headaches of manual tasks.

Using cloud-based software, or also referred to as Software as a Service (SaaS) provides you access to technology where you can store and access your data conveniently via Internet connection. The primary concern of business owners who are accustomed to traditional bookkeeping is the lack of proper training when it comes to using cloud-based tools. However, embracing cloud technology does not really mean you are going to completely abandon traditional technology. Today's cloud-based software ensures that the transition will be as smooth as possible.

1. Enable employees to collaborate
Your team members do not have to be physically present to collaborate on a project. Since cloud-based software enables everyone to access the project without worrying about the location, checking an invoice or adding expense receipts anytime, anywhere and from any device will no longer be a problem.

2. Easily Identify Discrepancies
The success of many small businesses depend on the relationships with distributors and vendors. One issue that may catch the attention of a distributor or vendor is when a bill has not yet been paid. Questions will be raised and these can greatly affect the relationship that has already been established. With cloud tools, bookkeepers can verify discrepancies to find out if a bill has been missed or paid. Verifying these discrepancies preserves vendor relationship.

3. Reduce manual tasks
The best part about using cloud tools is that you can access documents from any device. Since the documents are integrated with other cloud-based tools, team members will find it easier to access much-needed information. Manual data entry will also be reduced.

Cloud-based software makes it easy for small businesses to collaborate, verify discrepancies and reduce manual tasks. This provides owners more time to focus on other aspects of the business.  Some cloud software providers offer a trial version so reluctant businesses can give cloud technology a try before completely embracing it.

Financial Report: This is What Professionals Do

The financial report allows business owners to get essential information about the condition and financial performance of a business.

Being a business owner is not an easy task. You have to monitor your financial activity regularly and seize every opportunity to invest. However, these two important tasks will require prying into a financial report.

Bookkeeping is a task a business owner often avoids. Which is why they hire a bookkeeper to spare themselves from the headache.  Even if you already have a bookkeeper to deal with your financial statement, it does not mean you are off the hook.  You are a business owner. You need to know how things are going with your business. This means you should know how to interpret a financial report.

So breathe, clear your mind and read...

Known What To Read

A financial report contains a plethora of information. Since it is the summary of the health of your business, you will be presented with information you wish or you do not wish to obtain.

Decide what to read.

For instance, if you want to know whether or not your business is making a profit, read the profit and loss section. Allow your bookkeeper to discuss the strengths and weaknesses of your business before you proceed with asking for some sound recommendations.

If you wish to get a copy of the financial report's simplified version, you can ask your bookkeeper to provide it. However, you have to keep in mind that this shortened report will not give investors and investment managers a clear idea of your business.

Gain Basic Understanding of your Financial Statements

The balance sheet, income statement, and statement of cash flows are considered the core of your financial report. You cannot make sense of your financial statements unless you have a rudimentary understanding of your financial statement. If you know nothing about your financial statements, interpreting them will be a daunting task.

Check Profit Performance

You will know your business generates profit if it is making sales. It should also keep expenses which are less than sales revenue. Reading the sales revenue is the best place to start in determining the profit performance of your business.

Do you know the gross margin ratio of your business?

If you were to compare the current sales revenue with the previous year's, have the figures increased or decreased?

Compare Cash Flow From Profit

Cash flow is an important component of your business. It should continuously flow to maintain liquidity. Your cash flow will be used as your source of capital to grow your business.

You do not just make profit as you also need to generate cash flow. Cash is obtained from selling off some assets, borrowing money or getting shareowners to put money in your company.

Heed Signs Of Financial Distress

You will need to know how the solvency of your business looks. Do you still manage to pay your bills on time?

Analysing solvency involves searching for signs of financial distress. Failing to identify these signs can have a serious impact on your business.

Look For Any Possibility Of Fraud

Fraudulent activities can affect your business. It may only be noticed if the company is already losing thousands or worse, millions. If you are presented with a revised statement, you need to ask an explanation from your accountant or bookkeeper. All too often, restatement is due to the fact that the original financial statements were based on fraudulent bookkeeping or accounting.

Financial reports can be somewhat conditional, but it is an important source of information so investors are  informed about executive changes, economic trends, business takeovers and much more.

3 Fraud Prevention Techniques Every Business Should Employ

Many businesses are losing money because of fraudulent activities. While simply looking at the reports will not easily allow you to spot any fraud, prevention and detection are still essential to reducing loss. There are various types of fraud that can take place in the workplace. They are broken down into three categories: financial statement fraud, asset misappropriation and corruption. Financial statement fraud refers to schemes which involve intentionally omitting or misstating information in the financial reports. It is either the bookkeeper hides liabilities or inflates assets. Asset misappropriation is the type of scheme in which an employee exploits the company's resources. Corruption refers to extortion, bribery and even conflict of interest. In corruption, employees use their influence when doing business transactions only they can benefit from.

1.Inconsistent Financial Report

If you see omissions or misstatement of financial information, this is a sign that something is wrong with your financial statement. While mistakes can be committed every once in a while, committing errors deliberately becomes a fraudulent activity as it is done on purpose. It is important that you review your financial statement regularly so you will know if your bookkeeper is tweaking any essential information on your report.

2. Incorrect Bookkeeping Procedures

Correct payroll guidelines and procedures must be observed. If they are resistant to change and insist on keeping old procedures, the financial and payroll records from previous years must be investigated for any incorrect or misleading information.

3. Misfiled Paperwork

It can be frustrating when you cannot find any essential business records such as deposit slips, payroll records and supplier correspondence. These records should be kept as they are going to be necessary for keeping track of your financial transactions. If they mysteriously disappear, you know that your bookkeeping has got some explaining to do. 

Fraud Prevention

It is important for every business owner to create a reimbursement and expenses policy. For instance, billing your credit cards directly to your company must not avoided. bill them to the employee instead. It is also important to prepare an expense report for each employee and all receipts must be turned in for any business-related transactions. You should also set a daily limit as this will help you control the amount of cash employees spend. This policy imposes stricter rules that will enable you to monitor expenses effectively.  

Aside from the reimbursement and expense policy, you should also review financial records. These records should be complete, if any of the records are missing, you should ask your bookkeeper or the person in charge for explanation. Checks and balances must also be strictly implemented.                                  

What Does A Business Financial Statement Tell You

Your income statement is going to tell you a lot about the financial strength of your business. Aside from your income statement, the cash flow statement and the balance sheet are also very useful tools. Although bookkeepers and accountants are often the ones taking care of these statements, it is still essential for a business owner to gain basic understanding of these statements.

Cash Flow Statement

It is important for your business to have enough cash to stay afloat. Businesses often fail because of problems with cash flow. This is because cash may not always flow into your business. You can have a profitable business but still face cash flow issues. It is easy to identify whether or not your business is making a profit by merely referring to your income statement, but it does not give you details of the missing or delinquent payments. Business owners maintain a cash flow statement to gain a better understanding of the flow of cash in and out of your business. The update is done on a daily, weekly or even monthly basis. In determining your cash balance, you need to calculate the operational cost, asset investments and financing.

The operational costs will give you a clearer picture of the cash you are generating before taking the cost associated with investments or financing into consideration. The asset investments refer to the inflows and outflows from sales and purchases of long-term business investments which include equipment, property, assets and securities. The financing refers to the cash you receive from line of credit, business loan or the sale of stock.

Balance Sheet

The balance sheet shows the business assets, liabilities and equity of your business. Most likely than not, investors focus on your income statement, but the balance sheet can be used as a starting point for knowing the fiscal health of your business. The balance sheet shows you the summary of key financial information on a specific date or period of time. The balance sheet provides you a view of current and long term debt, asset management, net value of your small business and the comparative data where you can see changes in accounts receivable/payable, equity, inventory, retained earnings and cash.

Income Statement

The income statement is also referred to as a profit and loss statement. This is a useful too because it provides an overview whether or not your business is going well. The income statement also gives you a break down of the revenue generated and the expenses incurred. You will know you have a well-maintained income statement if it provides details of the profit of your business and the steps you should take to increase profitability.

5 Bookkeeping Habits Savvy Business Owners Adopt

When you decide to put up a business, the learning process will be never-ending. To some, a surviving business is enough, but without a long-term plan, your company will eventually join those businesses diving in a cesspool of debts. Romanticizing about happily ever after in running a business is not going to get you anywhere unless you develop smart habits that will keep your business thrive.

1. Leave tax returns to bookkeeping professionals

Have you ever found yourself being pulled in different directions to ensure your business do not take a nosedive? There are aspects of your business that you need to leave to professionals and one of which is preparing tax returns. It is important to outsource this task to someone who has the expertise because they are the ones who have trained financial eye. They are also well-versed when it comes to the ins and outs of tax deductions.

2. Understand what is happening with your business

Although you have bookkeepers and accountants to take care of your reports, this does not mean you should go entirely hands-off. You still need to actively participate in reviewing reports. That said, gaining basic understanding of business numbers is essential. Some of the information you should learn include trend in expenses, accounts receivable, profit and profit per customer. 

3. Choose reliable software

In the age of technology, it is imperative for every business owner to bring the right software into business. A good system will enable you to generate reports in minutes and ensure that the reports contain accurate information. Ask for recommendations from friends who have the same businesses as yours.

4. Document essential bookkeeping processes

Aside from gaining basic understanding of business numbers, documenting bookkeeping processes is also the best practice to follow. Noting the processes prevents confusion and answer questions. Once you know how bookkeeping works, it will not be difficult for you to spot errors as you already have an idea what could have gone wrong.

5. Keep receipts

Keeping expense receipts is another good habit a business owner should adopt. It enables you to keep track of your expenses and determine which direction your business is heading. While credit card purchases generate receipts and monthly statements, cash expenses need to be monitored regularly. These days, you can download accounting app that will give you the ability to take pictures of receipts as you go. This will help you track your expenses without keeping the paper copies.

How to Minimize Bookkeeping Costs

How to Minimize Bookkeeping Costs

Every business owner knows that managing an enterprise takes a lot of time and money, especially when it is just at the beginning stages.  When it comes to bookkeeping costs, however, this doesn’t have to be the case.  In this article, let us take a look at three possible ways in which you can minimize your bookkeeping costs.

1. Keep everything organized.

The simple task of keeping all your records organized can go a long way in reducing your bookkeeping costs.  The more details you have regarding each transaction, the easier it will be for your bookkeeper to do his or her job.  Whenever you pay a bill, take note of all the details involved, such as the date and method of payment.  This is particularly useful especially if you are handling more than one account.  Likewise, if you provide only invoices and not the payment receipts themselves, bookkeepers will not be able to record these until the transactions show up in your monthly statement.

In any case, it would be a wise idea to ask your bookkeeper directly how he or she wants you to present your transaction details.  This way, you are able to provide them with all the information that they need to keep your records updated.  Hence, by being organized, you are able to work efficiently with your bookkeeper, regardless of whether you are paying them an hourly rate or a fixed monthly fee.   

2. Separate your business accounts from your personal accounts.

Do not make the mistake of using a personal account for your business; otherwise, this will only make your records complicated and confusing for the bookkeeper to work with.  Moreover, whenever you are paid in cash, avoid the temptation of keeping some of it for yourself.  Instead, deposit it directly into your business account.  By doing so, you are able to avoid problems when the bookkeeper is matching your account deposits.  Again, this cannot be emphasized enough: keep your personal and business accounts separated.

3. Utilize a document management system.

In the olden days, business owners would store receipts in a file or a shoe box, which is then brought out when the bookkeeper comes.  The problem is, there are times when a receipt is misplaced or records suddenly get damaged in a fire or flood.  You can avoid this problem by utilizing a document management system.  This enables you to save a copy of your records, which can be accessed by you or your bookkeeper anytime.  There are many document management systems available that allow you to save your financial documents online safely and securely.  They are a great way of organizing and managing all your financial transactions, making things easier for your as well as your bookkeeper.

Keeping your records organized, separating your business and personal accounts, and utilizing a document management system are just some of the ways in which you can minimize your bookkeeping costs.  In this manner, you are able to save money and increase your returns in the process.

Lodge Your Tax Return Online

Tax returns can be lodged with a tax agent, but there is an easier and safer way to lodge your tax return.

Benefits of lodging your tax return online:

  • myTax allows you to lodge at your convenience as it is available 24/7
  • the information from your bank, employer and government agencies will be pre-filled by late August so the process will be quicker and easier for you
  • you are assured that your information is protected as myTax uses online banking encryption
  • your refund is available within 2 weeks
  • all individuals including sole traders can lodge their own tax return

MyTax is web-based so you do not have to download anything. Using any device-computer, tablet or smartphone, you can lodge your tax return online.

MyTax features and upgrades in 2016 include:

>new online tools that record depreciation and capital gains
>ability to amend or lodge prior year returns
>fully integrated tools and calculators
>myDeductions data automatically loads into your return except sole traders
>helpful messages that will guide you through lodgment

Pre-filling information

The information that you lodge is partially complete by automatically loading the current year information from organisations that report to the ATO including banks, employers and government agencies and the data from your account activity and previous tax returns. Once the information is ready, all you have to do is to review them to know if you need to update incorrect details or add missing details.

More often than not, pre-filling information is available within a couple of days after it has been reported to the ATO. The information is available by early August. If you want to check the availability of pre-fill information for your health funds, investment income and government payments, you simply check the website of myTax.

The information that can be pre-filled

Some of the information that can be pre-filled include your salary, wages, dividends from your shares, interest credited to you by the bank, private health insurance information and more.

The information will greatly depend on when the information was received from your employer and other organisations once you lodge your return. According to the law, it is necessary for organisations to report your information by August 14 for details of payment summaries and October 31 for information about your investments. It is also ideal for organisations to send the information much earlier. You have the option to check the information to pre-fill by starting your online return.

It is also important to resolve any discrepancies with the organisation that provided your data before you lodge your return. The ATO checks the information that organisations have provided and matches them with the information you report on your tax return.

Four Reasons You Need Bookkeeping Software

Issuing invoices, managing cash flow and tracking expenses are integral part of your business. Due to the process business owners have to undergo, these tasks are considered to be an administrative nightmare. This is why people who want to make the bookkeeping system easier have switched to cloud-based software. This way, mundane and repetitive tasks are automated so labor-intensive processes become a problem of the past. If you have not yet considered bookkeeping automation, here are four good reasons to do so.

1. It streamlines payroll process

Bookkeeping demands accuracy especially when it comes to dealing with payroll. This requires time and patience because you need to make sure that the details are correct. Since it is your employees' salary that is at stake, you need to have a simple but intelligent automated payroll process so you will have the ability to streamline staff payment process. Financial manage tools such as QuickBooks Payroll software helps you calculate taxes in minutes. You can also integrate with QuickBooks Online for your accounting solution to be more holistic.

2. It enables you to review and manage stock items easily

Businesses require tracking, managing and even reviewing stock items. These tasks must be done on a regular basis to keep business on its feet. If you have an inventory management software, you will be able to scan and create product barcodes easily. This is because the software simplifies the process and ensures that the details are accurate. The software will also make it easy for you to manage all tasks using one software system.

3. It simplifies your invoicing system

Invoicing is another time-consuming task that needs extra attention. It involves chasing up unpaid accounts. If you do not have a streamlined bookkeeping system, it is easy to lose track of payments due. This is why you need to have an automated invoicing system that will enable you to schedule invoices to be sent automatically to the customers. The invoices can be sent individually or in batches. An automated invoicing system also stores your invoices in one place so you can easily identify the ones that are already overdue.

4. It integrates CRM

If you have the option to integrate a customer relationship management (CRM) system, it will be much easier for you to focus on other aspects of your business. If you always find yourself juggling numerous client accounts  and you find keeping tracking of communication a tedious task, using lead management software will help you keep an eye on your business so you can improve customer satisfaction. Once you automate your CRM processes, you can also give your employees the ability to use a mobile solution so collaboration does not stay within the portals of your workplace.

Five BAS Errors And Ways To Avoid Them

If you are a business owner, you are surely familiar with the process of preparing and lodging Business Activity Statements (BAS). When you prepare activity statements, do you think of it as a mere obligation you need to fulfill? If you do not have keen eyes on preparing these statements, you will have the tendency to open your doors to mistakes. Here are the common errors you need to avoid when preparing your activity statements.

1. Do not change your PAYG Income Tax Instalment unless you are advised by your bookkeeper or accountant

You might be having a notion that the ATO calculates your income tax amount in real-time, but they are working about one to two years behind. The path your business takes can also affect your income tax amount. If your business shrinks or grows, the first step you may take is to change or vary your income tax instalment amount. Before you vary your income tax amount, make sure you check with your accountant or bookkeeper. You can pay for fines and penalties for doing this.

2. Remember to lodge by the deadline

As a business owner, you need to take note of the important lodgement dates. For BAS, you need to lodge on the 28th day of the month and 28 February for the December quarter. You will get an extra month to lodge if you choose to lodge via a registered BAS agent. Be careful with late lodgement because the ATO will fine you $180 for each month that the BAS is lodged late. You can be fined for a maximum of five months.

3. Not reconciling your GST and PAYG back to the balance sheet

There are instances when you need to make changes to a transaction or tax rate but when a BAS has already been lodged, the changes will not reflect on the reports. You can only identify alterations if you compare quarterly reports to the balance sheet accounts. You need to engage the services of your accountant or bookkeeper to reconcile PAYG and GST.

4. Failing to identify whether your accounts should be on the cash or accrual basis

Once you register for GST with the ATO, you need to know whether you will be using the cash or accrual accounting method. In theory, a turnover of less than $2 million should select the cash method, but this may not always be the best option. For small businesses, the accrual method is the right choice to consider because it can assist with cash flow.

All You Need To Know About GST Registration

If you are a business owner, you need to keep a few things in mind when its to registering for GST. For instance, GST registration will not be required if:

1. business turnover drops below the compulsory threshold
2. a change in business structure
3. closing or selling business

More often than not, it will be wise to cancel your GST registration as it can save you time and effort because this involves automatically cancelling some other registrations at the same time including:

> wine equalisation tax (WET)
> fuel tax credits (FTC)
> luxury car tax (LCT)

It is also interesting to note that you need to finalise all of your tax obligations before you consider cancelling your GST registration.

GST Registration

Secure an Australian Business Number (ABN) before you proceed with GST registration. There are three ways you can register for GST: by phone, through your registered BAS agent or tax agent and online via Business Portal. Once you have successfully register for GST, you will be notified in writing on your details including the date your registration is effective.

You are required to register for GST if:

> you wish to claim fuel tax credits for your enterprise or business;
> your business or enterprise has a GST turnover of $75,000 or more
> you provide limousine or taxi travel for passengers in exchange for a fare as part of your business, regardless of your GST turnover-the rules apply to both owner drivers and if you rent or lease a taxi;
> your non-profit organisation has a GST turnover of $150,000 per year or more

Registration is option for business or enterprise that does not fit into any of the above categories. For business or enterprise that wish to register, it must stay registered for at least 12 months.

When do you need to register for GST?

You can either register for GST when you first register your business or at a later time. You will also need to register for GST if you have just started a new business and expect it to reach the GST turnover threshold or more during the first year of operation.

You need to check each month whether or not you have reached the threshold or exceeded it if you have not yet registered for GST. Registration must be done within 21 days if your turnover has already exceeded the relevant threshold.

You will only have to register for GST one even if you have more than one business to operate. You will be required to pay GST on the sales you have made since the date you were required to register. The payment will also include interest and penalties.

Ways Of Enhancing Your Bookkeeping System

In a world where everything is rapidly changing, you need to act fast as a business owner so you can continuously enjoy quality and timeliness in your workplace. One aspect that you need to pay heed to is your bookkeeping system. This is why you need to take advantage of the proliferation of technology. Before bookkeeping software came to existence, bookkeeping was a labor-intensive process as you need to spend a large amount of time to carry out a task. This includes entering transactions and even reconciling bank statements. All of which can be time-consuming as you need to make sure that the information you enter is error-free. In today's new technology, bookkeeping processes can be done in a matter of minutes.

Project Management Tools

Aside from preparing financial statements and reconciling accounts, your bookkeeper must also know how to interpret numbers and provide recommendations to key stakeholders. Technology will be vital in this process. This is where project management and time tracking tools come in. They allow bookkeepers to monitor workflow to find out if there is any inefficiencies in the workplace. These tools also enable business owners to find out about customers who generate the most revenue. You will also need inventory management tools so you can bring data together and answer questions about budget and goods. This tool can also provide you a way to analyse customers by geography, industry and the products they purchased.

Bookkeeping Platform

These days, one-size-fits-all approach will never work because each business has different goals to accomplish. Choosing bookkeeping platform that can be customised is ideal for businesses. With these platforms, you will have the ability to add new features and functionality. There are application programming interfaces that allow pieces of software to share and communicate data so you can integrate point of sale, online and mobile payments systems, email marketing and customer loyalty programs.

Cloud Computing

When it comes to discussing the future of bookkeeping and accounting, cloud computing will always come to mind. Cloud computing is widely used for reducing the turnaround time of bookkeeping. These services are helpful when it comes to giving bookkeeper real-time information. There are services that have the ability to extract key data from receipts and pull statements and bills into a secure hub. These details are published into cloud-based accounting software. With this ability to provide real-time information, it is possible to reconcile most accounts. It will be easier for business owners to collaborate with bookkeepers and accountants this way.

Choosing Bookkeeping Software For Your Business

When it comes to going digital, you need to make sure that your bookkeeping system keeps up with the changes as well. The main purpose of using bookkeeping software is to streamline the processes so you can boost productivity and performance. This is why it is essential to choose the kind of software capable of bringing speed and accuracy into your bookkeeping system. While features of software can be pretty overwhelming, not all of them can be beneficial to your business. Make sure you are keen on choosing the software that suits your needs. There are affordable versions of bookkeeping software but there is no guarantee that you will be able to maximise the software's benefits. Make sure you choose the ones that can give you affordability and quality.

It is not easy to choose the right software for your business so you need to make sure that you follow the correct search process. Keep in mind that as you grow your business, the way you carry out your daily task including bookkeeping must keep up with the changes as well. Here's how you can find the right software for your business needs.

1. Research About Bookkeeping Software

It is hard to make a decision about the software to consider if do not know much about bookkeeping software. It is imperative to do a research so you will know the software that provides your needs. Start talking to your competitors so you will know about the software they are utilising. Your bookkeeper and accountant might also give you some suggestions that you can use to narrow down your selection. Once you have come across a possible option, check if they have a trial version.

2. Know the software that suits your needs

There are two software options for you to choose from: generic and industry specific software. When it comes to choose bookkeeping software, you need to see to it that you know which one works for you. There are some features that you need to take into consideration for you to decide if you should choose stick to generic software or opt for industry specific.

3. Analyse your budget

Aside from the features, you will also have to consider your budget as a deciding factor, but this does not mean that you should skimp on your bookkeeping software. Choose the software that comply with your business requirements. Never choose the software that offers you the lowest price because you might save money, but not get the result you are looking for.

4 Bookkeeping Tasks You Need To Automate

While it might seem to be surprising, nearly half of today's small businesses still do not use automate essential bookkeeping processes to reduce repetitive tasks. If you are one of the businesses that still spend hours preparing expense reports, you may need to embrace automation to carry out your bookkeeping task efficiently. Here are four bookkeeping tasks that need automation.

Payroll

For small business owners, payroll taxes are considered to be the company's biggest burden. More often than not bookkeepers spend 10 hours or more per month for managing payroll. This means that bookkeepers spend a total of 120 hours per year just for managing payroll. However, the number of hours you spend for payroll taxes can be reduced when you automate your payroll. Aside from cutting down your bookkeeping load, you can also create instant paycheck and calculate payroll taxes.

Expense Reporting

Failing to submit expense reports on time is a violation of company policy. These variables will definitely cost you money and may even create bookkeeping and tax problems in the end. When you automate expense reporting, you can be sure that you will have a streamlined bookkeeping process. The best thing about automation is that you will have the ability to use your mobile devices to automatically snap pictures of your receipts. You can also automatically generate reports and integrate them with your travel bookkeeping to ensure that your travel expenses comply with company policy.

Inventory

It may take days to take inventory but you can cut back on this wasted time by simply automating your inventory management. When you integrate your inventory management with your bookkeeping software, you will have the ability to automatically create sales report, pack list, reduce inventory errors, generate invoices and speed up the reorder process.

Invoicing

You can easily lose track of the individuals you paid and the ones you haven't if you do not have bookkeeping software to automatically generate invoices. Oversights can happen all the time and this can give you a headache as it can result in losing money and cash flow problems. Make sure you use bookkeeping software so you can generate invoices that you can print or email. While waiting for the payment to come in, your bookkeeping software can provide an automated system so you will be able to sustain sufficient cash flow. This will also allow you to work in conjunction with your bookkeeping software so you can select an outstanding invoice and request corresponding funds over a specific period of time. Automating your invoicing system can ensure that the payment is deposited into your account as early as the next day.

Bookkeeper Mistakes That Greatly Affect Your Business

Some businesses are doomed to fail due to mistakes which are left uncorrected. These mistakes may be simple, but they can great affect your business if you do not take the time to talk to your bookkeeper to find out what really is going on. Some bookkeeping tasks may be repetitive while others require extra time due to their complexities. One thing is for sure though: failing to finish the task can create a ripple effect on your business. There are reasons a bookkeeper may commit mistakes: inefficiency or lack of resources. Whatever the reason, it is important that you and your bookkeeper see eye to eye so you will know which direction your business is heading.

1. Not monitoring cashflow

Cashflow is essential to your business because it is an indicator of your future business plans. A key part of this role is ensuring that your debtors pay you promptly and your bills are also paid on time. Your bookkeeper should pay attention to metering the cash out and getting the cash in. If the bookkeeper is not paying attention to these things, your business can end up insolvent. It is important that your bookkeeper completes debt collection, invoicing, receipts, purchases, purchase orders and bank reconciliations. Mistakes with cashflow monitoring can be avoided if your bookkeeper regularly updates you with the current cash position of your business. Your bookkeeper should also help plan for the cash requirements for any business development you are planning.

2. Not cooperating with your accountant

Although your bookkeeper is not as qualified as your accountant when it comes to correctly handling everything, it is still important that your bookkeeper work with your accountant. There are financial aspects of your business that might be complex and your accountant may be needed to deal with the problem. Your bookkeeper must coordinate with your accountant to attend to responsibilities such as payroll and superannuation, compliance and coding. Make sure you enable strong lines of communication between your accountant and bookkeeper. When your bookkeeper complete tasks in a timely manner, more tasks will be accomplished.

3. Not keeping all receipts

For legal purposes, all your receipts and invoices must be filed and archived for at least 5 years. These will serve as strong evidence in case someone sues you. It can also support your case if you are going to use. The receipts and invoices are also going to justify any claims you make. Your bookkeeper should file your paperwork accurately and in a timely fashion. You can also go paperless so prevent losing important documents.

Why Time Is Essential For Bookkeepers?

Was there ever a time when you requested for an essential document from your bookkeeper only to find out that your request has fallen on deaf ears? Is your bookkeeper always missing deadlines without any valid reason? You might have been constantly reminding them about the importance of the task you assigned, but you are not hearing from them as though they have fallen off the face of the earth. These things may not matter to you but when you are always not getting what you are expecting from your bookkeeper, this raises a red flag and it should be a cause for alarm. Your bookkeeper might have a problem with time management and that is also the reason they cannot deliver.

When Time Management Becomes An Issue

You may be thinking that your bookkeeper has too many tasks on their plate, but this might not be true. There are still some reasons why your bookkeeper cannot keep up and one of which is the lack of time management. Why is time management so important? Is it really essential for bookkeeping? When it comes to bookkeeping time is going to be of essence. A bookkeeper should deliver your request as they are necessary for checking your financial report. The documents are needed to verify the information on the financial report. There might be some discrepancies on the report but if the bookkeeper has not presented any evidence that can back the report, it might be difficult to correct errors or irregularities.

One thing that can correct issues with time management is creating a to-do list. The to-do list must not only include the task but the amount of time required to finish the task. This means your bookkeeper knows the task that they need to prioritise. It is easy to put things off when your bookkeeper does not know which task is urgent and important. With a to-do list they will be able to get an idea of the tasks they need to complete on a weekly basis. You will also need a systematic approach so you can monitor your bookkeeper and help them get things done.

A systematic approach allows your bookkeeper to develop a habit of planning. With this approach, they will be able to know which task will take a large chunk of their time. A problem with bookkeeping is not hard to deal with if you know how to correct it. A bookkeeper needs to be flexible whatever changes may take place in your organisation.



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