Tips To Make Bookkeeping Hassle Free

Everyone is aware that keeping accurate financial records is not a simple endeavour. Although doing it properly might be laborious and time-consuming, its importance cannot be overstated. You will save money on taxes, have precise financial records for your business, and constantly stay up-to-date with the latest changes in tax legislation if you have a solid bookkeeping system in place. These are just some of the many benefits of having a strong bookkeeping system in place.

In today's piece on the company blog, we're going to discuss some advice that will make the process of keeping the books easier for both you and your business. Let's get started!

Does the thought of balancing your chequebook or keeping track of all of your small business's expenses fill you with dread? If that's the case, you'll find some helpful advice for keeping your books in this post.

When it comes to controlling your finances, there are a lot of different things you can do to cut down on the amount of time and effort it takes, such as setting up automated payments with your bank or utilising a spreadsheet. Continue reading for more information on how the application of these straightforward adjustments might assist make maintaining books simpler and less aggravating.

If the thought of performing your bookkeeping fills you with dread, there are some straightforward actions you can do to make it feel like less of a work. You won't feel as stressed about needing to keep up with your reading and other assignments if you follow the suggestions in this article.

To begin, organise your receipts and any other papers that may be required in order to finish your bookkeeping responsibilities and set up an efficient file system to store them.

You are free to employ whichever kind of strategy provides you with the most effective results; just keep in mind that simplicity is essential! The next step is to begin with the records pertaining to the payroll system.

It is possible that this does not apply to you if you do not have any employees; however, if you do, separating the work that needs to be done between each payment period will simplify things significantly when tax time rolls around the next year.

How Do You Keep Your Books Up to Date?

Documentation is not the primary motivation for most people when they launch a new company. Nobody's idea of a good time is to sit at a desk for hours adding up receipts or shuffling bills back and forth – unless, of course, you're just starting out as a bookkeeper or accountant.

Keeping on top of your bookkeeping will not only help you sustain a healthy cash flow inside your company, but it will also enable you to recognise patterns in your financial situation at an earlier stage. As your company expands, it is absolutely essential that you develop the ability to identify possible financial issues before they escalate into a crisis.

Accounting is an important function in all types and sizes of businesses. However, as owners of small businesses have to balance the many other tasks that come with running and maintaining day-to-day operations, this responsibility frequently falls to the bottom of their priority list. Accounting, on the other hand, is something that should never be an afterthought.

Keeping your accounts in balance can assist in providing a financial forecast that extends several months into the future and can alert you to potential gaps in your finances. In the event that things go difficult for you, having accurate accounting knowledge might even assist you save your business.

Accounting is typically relegated to a lower priority for small firms for a number of reasons, including the fact that it is time-consuming and daunting. Forty percent of owners of small businesses believe that the most challenging aspect of running a business is managing the company's finances. Accounting errors can put a temporary stop to the expansion of a small firm and put the owner in a precarious financial position.

In this piece, we will provide you with a collection of the greatest accounting advice to help you avoid making frequent mistakes that could have an adverse effect on your company. When you finally have your accounting in order, you'll be able to enjoy the rewards that come along with it.

The Keeping of Your Books Can Be Done in Three Steps

When separated up into three phases, the current method of preserving your books is simple to comprehend and easy to understand. Always make sure you have a receipt or some other form of verifiable documentation for every single payment made to and expense incurred by your company.

Your records of both income and expenditure should be summarised at regular intervals (daily, weekly, or monthly). Create financial reports on your company with the help of your summary. These reports should provide you with precise information about your company, such as the amount of monthly profit your company is earning or the value of your company at a particular point in time.

The aforementioned ideas are applicable regardless of whether your bookkeeping is done manually on ledger sheets or through the use of accounting software.

Step One: Receipts Should Be Saved

Every single purchase and sale that your company makes needs to be supported by some kind of record that details the amount, the date, and any other information that is pertinent to that purchase or sale. You'll make use of these to compile a summary of your financial dealings.

Your technique of maintaining receipts can range from simple slips stored in a cigar box to an advanced cash register that is connected to a computer system. Both of these options are acceptable from a legal standpoint. For reasons of efficiency, you should go with a system that is tailored to the requirements of your company. For instance, a tiny service business that only takes on a small number of jobs here and there might be able to get away with a very basic strategy. On the other hand, the higher the volume of your company's sales and expenditures, the more sophisticated the receipt filing system needs to be.

Step Two: Establishing Ledgers and Making Posts

A finished ledger is nothing more than a summary of the income, expenditures, and anything else that you're keeping track of in the accounting process (entered from your receipts according to category and date). In the future, you will make use of these summaries to provide answers to particular financial queries regarding your company, such as whether or not you are earning a profit and, if so, how much that profit is.

Send out receipts on a regular basis. You should make it a habit to enter the monetary totals that appear on your sales and purchase receipts into your ledger on a consistent schedule, such as once a day, once a week, or at the very least once a month.

This activity is known as posting. The frequency with which you do this is determined by a number of factors, including the size of your company's revenues and expenses, as well as how accurate you want your books to be.

The number of your sales will determine the publishing schedule you use. In general, the higher the volume of sales you process, the greater the frequency with which you should publish transactions to your ledger. For example, a retail store that makes hundreds of sales each day totalling thousands of dollars ought to update their status on a daily basis. Due to the high volume of sales, it is essential to stay on top of what is occuring each day and to avoid falling behind in the necessary documentation. To accomplish this, the bustling retailer needs to make use of a cash register that, at the push of a button, computes the day's total sales and uploads them to a computerised accounting system.

However, if your company is more low-key or conducts only a handful of significant transactions each month, like a small website design shop, dog-sitting service, or swimming pool repair company, you could probably get away with having it posted once every week or even once a month without too much trouble.

Utilize an accounting programme if at all possible. You have the option of purchasing accounting software that, when you enter your data, will automatically construct the ledgers for you (and then automatically generate the necessary financial reports from the same information). It is recommended that all new businesses, with the possible exception of the tiniest ones, utilise some kind of accounting software package to assist them in maintaining their accounts. Personal finance software such as Quicken is usually sufficient for the needs of a microbusiness.

Step Three: Creating the Most Fundamental of Financial Reports

The consolidation of multiple critical aspects of financial data about your business into a single document is one of the primary reasons why financial reports are so essential. Consider it in this light: although your income ledger might indicate that your company brought in a significant amount of money over the course of the year, you won't be able to determine whether or not you made a profit until you compare your entire income to your total business expenses.

Even if you compare the sums of your monthly income and expenditures, this will not tell you whether or not your clients who use credit are paying you at a rate that is sufficient to maintain appropriate cash flow through your company and allow you to pay your debts on time.

It is for this reason that you require financial reports: to compile the information from your ledgers and form it into a form that presents you with an overview of your company.

The cash flow analysis, the profit and loss projection, and the balance sheet are the three most important reports that you need to generate on a consistent basis. (These periodical reports are something that may be generated by a variety of accounting software, including but not limited to QuickBooks and Quicken Home and Business.)

Tips For Making Bookkeeping Easy

Help is at hand if you despise keeping the books for your company but like running it. By adhering to these six guidelines, you will be capable of spending less time on administrative tasks and more time engaging in activities that bring you joy. If you're like the majority of people who operate small businesses, the thought of having to do the books definitely doesn't fill you with a sense of elation and pleasure.

Aside from the fact that it is tedious and time-consuming, the reason you got into industry in the first place was not because of this. But in the long haul, if you want your business venture to be the achievement it deserves to be, you'll need to get on top of its financial administration, which is something you'll need to do if you want to make it a success.

The following are six suggestions that can help alleviate the monotony of bookkeeping.

Get Rid of Extra Paperwork

Okay, so obviously not all of the paper will slide. The paperless office is similar to the flying vehicle of science fiction in that it is always prophesied but never quite arrives. Nevertheless, it is difficult to explain that you require all of that paper in your workplace when there is software available that can handle bookkeeping in a more effective manner.

There are a multitude of issues associated with paper. It gets misplaced or misreported; coffee gets splashed on it; you use it to make notes on when a customer calls, and then you unintentionally toss it away; it's tough to find records when you need them (like when you're doing your taxes), and it's difficult to maintain up to date.

How you can help

When you record more information digitally, it becomes easier to access that information, which means you spend fewer hours keeping the books.

Use accounting software to perform your bookkeeping (yeah, that's right, a solid accounting solution will enable you to do the books and a lot more, too), and you'll be able to clear out all of that paper clutter from your workstation.

Make Your Receipts Digital

If you tallied up all of the time you spend collecting, organising, and filing receipts, you might feel remorse that you did not use that time for activities that were more productive.

The most difficult challenge may be to locate them. They might be anywhere in the world if you run a nomadic business like theirs. When they are allowed to accumulate, it becomes difficult to deal with them.

Because you need to devote an ever-increasing portion of the day to getting on top of them, you continue to put them off indefinitely. However, if you don't keep track of your spending, you'll end up losing money in the long term.

It is very likely that you will wind up paying a higher tax bill than is necessary, and this will throw a wrench into your plans for the future about your finances.

How you can help

You can stay on top of your receipts, maintain accurate financial records for your company, and save time if you spend only a few minutes each day scanning and digitally documenting your receipts. You can use a desktop scanner, which is typically incorporated in newer printers, or an app for your smartphone.

On-Time Invoicing

It is simple to become so preoccupied with one's day work that one forgets to send out invoices. Avoid having this come to pass. It is imperative that you send out invoices as soon as the work has been completed and approved if you want to maintain a steady flow of income into your company.

What you're able to do

If you have a particularly large job, you might want to figure out a way to bill for it in stages so that you can continue to operate your company while you work on the project. This will allow you to maintain your income while you work.

Invoicing, the transfer of data from purchase orders, the automation of repetitive activities, and the avoidance of the time-consuming and error-prone rekeying of data are all features that should be supported by good accounting software.

Numerous customers will, as a matter of course, pay within the term that has been agreed upon, which is often 30 days. However, some people might require a little push, which takes us to...

Assure On-Time Payment from Your Clients

Nobody enjoys having to pursue customers for payment. In the end, these are the kinds of people whose business you need to attract if you want your company to continue expanding. You don't want to make them angry, do you? However, if they have accepted your work, agreed on a charge, and established a timetable for sending invoices, they must pay promptly.

Some people could accidentally miss the due dates for their payments. Others might try to keep their cash on hand until they are absolutely forced to make a payment. Last but not least, there are those who may be experiencing severe financial difficulties and have an extreme lack of cash.

What actions you can take

You should look for accounting software that can monitor invoices that are past due and either notify you or send an automated reminder to pay the payment.

You can avoid the unpleasant process of having to contact and chase up your money if you use an automated reminder instead, which is sometimes all that is required. Additionally, it is important to maintain communication with your customers.

If you have a consistent line of communication with them, you will be able to determine in advance if they will be unable to meet their payment obligations on time and can then take the necessary precautions to ensure that you will not be in a bind when the time comes for you to be paid.

Automate Taxes

It is impossible for a small firm to avoid submitting tax records, which necessitates locating and compiling a large number of separate pieces of information.

If that information is scattered all over the place, such as in paper receipts and invoices, then this process is going to be quite tedious and cumbersome. Therefore, you will probably put it off until the very last minute, which will result in additional stress for you.

In addition, if you are the type of person who either forgets to keep receipts or throws them away by accident, you run the risk of having to pay a higher amount of tax than is required.

What actions you can take

If you maintain accurate accounting records, a significant portion of the taxes procedure can be computerised with the help of the appropriate software solutions.

If you keep records in the accounting software you use throughout the year, filing your tax return won't be nearly as much of a hassle when it comes time to do so.

Bank In Real-Time

Why wait for a bank statement to find out if your financial situation is stable or if you are on the verge of collapse?

Internet banking and mobile banking make it simple to keep track of your transactions as they occur. If you use the appropriate software, those transactions can also be immediately reconciled with your company's finances, ensuring that everything adds up correctly.

What actions you can take

The majority of financial institutions now provide customers with the ability to view their accounts online. If you have a competent accounting software programme, it will automatically take transaction information from your bank account and reconcile it with your other accounts.

You have the ability to take charge of your finances and manage your cash flow, expenditures, investments, and borrowing. This will make it easier for your company to gain access to financing in the future, which will put it on the route to expansion.

Tips for Businesses on Bookkeeping They Should Know

You have a lot of responsibilities to take care of as the owner of a business. From administering the day-to-day operations of your company to interacting with clients, developing marketing plans, building professional relationships, and ensuring that everything runs smoothly. Finding the time to organise your financial spreadsheets, perform an in-depth analysis of the figures, and manage your cash flow can be challenging.

The reality is that properly managing your books, maintaining control over your finances, and ensuring that your company is in compliance are all essential to achieving long-term success in your organisation.

Therefore, before you spend another late night examining spreadsheets, I have compiled a list of the 12 most important bookkeeping principles that every company should be aware of.

And remember, you can always come to us for assistance if things get too difficult! We are bookkeepers in Melbourne who are able to organise the financial aspects of your company.

Separate your personal and professional accounts

At first glance, it may not appear to be a significant issue if you combine your personal finances with those of your company. However, every company ought to have its own distinct corporate bank account that is distinct from any personal financial accounts that may also exist. Depending on the structure of your company, having a separate bank account for your business may be required in many instances.

You will be able to save a lot of time, effort, and headaches by using this separate account since it will make it much simpler for you and your bookkeeper to sort through the sales and purchases that are pertinent to your business.

Streamline your bookkeeping with software that runs in the cloud

We are fortunate to live in an era where cloud-based accounting software provides you, as the owner of a business, the ability to access the information pertaining to your company anytime you feel the need to do so.

Because of technological advancements, it is now possible to manually calculate amounts, filter through mounds of papers, and review spreadsheets every single month. Cloud-based software does the majority of the laborious work for its users today.

Accounting software can send invoices to clients at the appropriate due date, monitor your outgoing and incoming expenses, and provide reports on your company's cash flow all on its own.

There is a wide variety of software available to choose from. The alternative that simplifies your life is the one that you should go with, but if you aren't sure which one is best for you, you can always consult with a bookkeeping professional who can provide you with enlightening guidance.

Establish a simple system for keeping records

Every transaction that your company completes should be documented and structured in a way that is straightforward for you to keep in order to ensure that your cash flow remains on track at all times. You will be able to better foresee future opportunities for your company if you stay on top of all financial records, including invoices, receipts, and costs. This will also help you maintain tax compliance in the event that an audit is conducted.

Paper receipts can be easily digitised, but if you wish to maintain paper records instead, they should be stored in a cabinet that can be locked and secured somewhere, and they should be organised according to a straightforward system. It is also highly recommended that you maintain a backup copy of your records in the event that you lose any of them.

Alternately, the majority of cloud-based accounting software will retain these records for you if you scan receipts with your phone or forwards electronic bills directly to your online bookkeeping system for the purposes of record preservation and reconciliation.

Set Reminders for Crucial Due Dates

As a business owner, the majority of your time is spent reacting quickly to a variety of different challenges. Because you have so much on your schedule, it is simple to lose sight of the dates on which you should pay your GST, payroll, and the regular invoices for your firm.

You should remind yourself at regular intervals to prevent missing deadlines, as this could result in a fine or in your partner being dissatisfied with you. You can accomplish this task by using the online version of your email calendar or even your mobile phone.

If you check your physical calendar on a frequent basis, even jotting down notes a few days before the deadline will help you stay on track with all that needs to be done.

Create an Audit Trail

Even if you keep meticulous records of your financial transactions, you run the risk of being selected for an audit by the relevant tax authorities. This is due to the fact that you are expected to leave a trail of paperwork that corroborates everything that your clients have paid for and everything that you have acquired.

An audit trail is basically a selection of documents that indicate the operations documented in your books are, in fact, true. These documents are kept in chronological order to make the audit trail easier to follow.

If you have any problems with things like tax mistakes, missing source papers, or missing transactions, your audit trail can assist you to reconstruct your steps and figure out what went wrong.

Understand Your Business Costs

When you first start operating your business, it can be difficult to anticipate the kinds of charges that you will have to pay and to know which of those costs are tax deductible.

For instance, expenses that are directly connected to the running of your firm and the generating of your income can be deducted from your taxes. If, on the other hand, you purchase anything that is only for you, you won't be able to add it to any of your accounts.

When you combine your personal and professional finances, you won't be able to simply claim reimbursement for everything you spend. The first step is to investigate and comprehend what can be deducted according to the laws of the Australian tax system. If you are unsure of what types of purchases qualify as tax deductions, you should get in touch with either a qualified accountant or the tax office in your area.