Tag Archive for businesss

12 Bookkeeping Tips For Your Business

accounting2Bookkeeping is probably not the most exciting part of your day, but it is a crucial component of running your business that cannot be ignored. Whether you hire someone else to do it for you or do it on your own, it needs to be regularly maintained and monitored. By keeping your financial records organized throughout the year you will be able to keep your business focused. Additionally you will be able to assist your accountant when it comes time for the financial year end.

 

Here are 12 bookkeeping tips to help your business stay on track and flourish:

 

Find a good bookkeeper

A professional bookkeeper can train you on your software, answer any questions and fix any mistakes that might have been made. Ask for help when it comes to running your business in the best way possible.  Your business can only benefit when your financial affairs are all in order.

Invest in technology

Accounting/bookkeeping software will make it easy to be efficient, accurate and up to date.  More and more business owners are turning toward cloud software and other accounting solutions that allow them and their accountants to access financial information from any electronic device.
Keep personal and business finances separate

Never mix the two, it will make your accounting much more difficult to handle. It’s a lot easier to keep accurate records if there is only one type of account.  There will not be any guessing as to whether it’s a personal or business expense. A lot of time will be saved by keeping these accounts separate.

Plan for major expenditure

Set aside money for major expenses like large stock purchases, office equipment and repairs and maintenance.  By budgeting for these types of expenses, the funds will be available when you are ready not when you can afford it.

Set aside money for taxes

Setting aside money each month towards paying your businesses taxes will mean your ATO obligations will always be met on time.

Keep an eye on your Creditor Invoices

Late and unpaid bills can affect your businesses credit. Keep your bills organized and always pay on time. And if you can’t pay of time, keep an open line of communication with your vendors.

Reconcile bank accounts monthly

It is important to do bank reconciliations for all your bank accounts, credit cards and petty cash.  You will have accurate and up to date information including profit and loss and be able to manage cash flow. Another reason is that it will cut down the amount of time needed by your external accountant in preparing your year-end figures for tax and statutory compliance.

Review your cash flow statement as often as possible

The cash flow for most small businesses is constantly fluctuating, which means it needs to be regularly monitored. If you are using an online bookkeeping software program, it will be easy to generate and review your cash flow statement from anywhere. This way you can avoid insufficient fund charges by researching financing options in advance and making sure all of your debts are covered.

Avoid cash

If cash is used, it is hard to keep track of spending. By using a debit or credit card you can keep track of amount spent, where it was spent and when it was spent. This makes tracking your expenses much, much easier.

Schedule a set time each week to enter all invoices

Make sure that there is a portion of your weekly agenda designated specifically on managing your finances and updating your records. Depending on the volume of invoices you receive, this could be easily accomplished in 30-90 minutes per week, especially if you are using an accounting system with quick entry fields and handy drop-down toolbars.

Regularly check up on your debtors

Make sure you stay on top of your accounts receivable so that you are receiving payments from clients when they are due. Regularly running an accounts receivable report and issuing monthly statements to clients will help you stay on top of monies that you are owed.  It will also assist with your cash flow.

Good filing system
Maintaining a good filing system is imperative in keeping your paperwork organized.  You will always be able to find ‘that piece of paper’ when you need it.  Or go one step further and create an electronic filing system and do away with ‘that piece of paper’ altogether.

 

By keeping your records in check, you will be able to spend less time on business finances and more time on growing your business. For more information please contact us at info@laebusiness.com

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Accountant vs Bookkeeper

logooAccountant vs Bookkeeper

What is the difference between a bookkeeper and an accountant? A bookkeeper handles the day-in day-out financial record keeping and reporting. An accountant specializes in the preparation and filing of taxes. Having a good bookkeeper is just as important to the growing business as having a good accountant.
Cost is another significant difference between an accountant and a bookkeeper. For this reason it is very important that you allocate your resources accordingly. You do not want to be paying your accountant to perform bookkeeping functions, this will eat up most of your financial services budget.
 Accountants do not have the time to handle day-in day-out financial record keeping and reporting, that’s why they hire bookkeepers.
Bookkeepers perform a critical function for the firms and organizations they serve. Regularly challenged to maintain precise and accurate records, bookkeepers produce the vital reports that keep management up to date on the financial condition of their company.
Bookkeepers are responsible for maintaining the business checkbook. They record routine money transactions like customer payments into a cash receipts journal and checks to vendors into a cash disbursement journal. They also process payroll. At month end they transfer or post the journal totals to the general ledger in preparation for financial statements prepared by the accountant. They prepare monthly quarterly and year end financial statements.
Accountants are responsible for the design and management of the financial systems that bookkeepers use. They prepare tax returns at year end. Accountants may also prepare budgets for management and loan proposals for bankers; they may perform cost analysis for the company’s products or services.
Hiring a bookkeeping service may often be a good solution for the small business owner. A good service will communicate well with your accountant so when tax time rolls around, the accountant will need to spend as little time as possible on your tax return keeping your accountant’s fee to a minimum. Make sure you understand the reports you get back from your service. You want to make the most of the information to make productive decisions for your business.
Both bookkeepers and accountants are important to your business. Knowing the difference between them will not only assure you of receiving the best information on which to base your financial decisions, but will also save you hundreds of dollars per year in fees.

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