Bookkeeping Tips To Start The Year Right

For small business owners, the New Year is also the best opportunity to rethink things and determine what else needs to be done. The financial aspect of your business is often overlooked especially if you have a bookkeeper or accountant that takes care of your finances. Unfortunately, things may not go as planned if you do not have a thorough understanding of how financial aspect of your business works. As you are about to welcome another year, now is the time to analyse and reflect on the things you may have missed out on doing.

1.    Choose bookkeeping software that meets your needs

If your business is not yet using bookkeeping software to make your day to day tasks easy and hassle-free, you should consider using it can provide you the most convenient way of accomplishing your task. However, you should also keep in mind that software is not created equal. This is why you should not choose the first one you come across. Make sure the software you choose is tailored to your needs.

2.    Engage a competent bookkeeper

If there are some aspects of your business that you have to reassess due to bad bookkeeping, you should choose a bookkeeper that can put your business structure in proper perspective. A bookkeeper should assist you with aspects like obtaining an ABN, GST registration, payroll set up, BAS and tax lodgements etc. Make sure you search for a bookkeeping professional before the end of the financial year and obtain advice from an expert so you can prevent nasty surprises along the way.

3.    Never combine personal and business finances

Using the same bank account for your business and personal transactions can spell trouble and this is the habit you need to get rid because it takes away your ability to track your finances. The reason you need to separate your personal and business finances is to avoid doubling your bookkeeping fees. Make sure you open a business account and use a personal savings account and credit cards for personal spending.

4.    Keep receipts

The ATO requires business owners to keep data for a minimum of 5 years so you can keep your finances in check. However, five years of data have the tendency to add up over time and going paperless is the best option. Aside from saving physical space, the data are also stored safely for future retrieval.

5.    Avoid over categorising

You may find yourself get caught up with lots of details and you have the tendency to create separate account for each item. While categorising these items is a good practice, you should also avoid over categorising your items as you may find it difficult to look for the items you need. Make sure you categorise bookkeeping items accurately.

6.    Prepare funds to pay tax

It can be stressful to fall behind your tax payment schedule, but instead of allowing delayed payments to take a toll on your business, you should consider setting aside funds so you can pay tax in a timely manner. You can either open a separate bank account for paying taxes or simply transfer funds from the business account to pay these taxes.

Andrew Donnelly

Written by : Andrew Donnelly

Andrew Donnelly is a degree qualified accountant and registered tax agent. He is the principal of Brisbane Bookkeepers, which provides bookkeeping services to small businesses in Brisbane and its immediate surrounds.

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­ Questions? Give Andrew a call 0450 605 592