Brisbane Bookkeepers & Taxation Blog

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Is Bad Bookkeeping A Big Deal?

For small businesses, getting a bookkeeper is considered another big expense. Perhaps you have never considered the serious impact of bad bookkeeping on your business. However, if you are going to see the big picture, you will realise that it is indeed necessary to have someone to handle the financial aspect of your business properly. You may not easily realise the problem that bad bookkeeping creates but once you see your financial statement in chaos, you will know how important good bookkeeping is.

Why you should invest in a good bookkeeper?

•    It gives you peace of mind.  You have nothing to worry about knowing your finances are in good hands. Having someone who has full understanding of your finances can give you an assurance that you will not be going out of business. Although a bookkeeper executes simple procedures such as record keeping, it has a huge impact on the outcome of your business.

•    You can put your business in proper perspective. When you cut cost on hiring a bookkeeper, you will realise in the end that have not really saved money, but accumulated additional expenses. With a good bookkeeper, you will be able to ensure that the lifeblood of your business is handled properly. Aside from taking care of your accounting bookwork, there are various responsibilities that a bookkeeper needs to take care, but an inexperienced bookkeeper may not be able to provide you the results you are looking for.

•    You are assured that your business is taking the right direction. It is easy to determine your business is headed toward the right direction if you have your bookkeeping in place. If your books are incorrectly completed because you just appointed a family member or friend to carry out the bookkeeping task, you will realise that there are data details incorrectly entered. It can take some time before you correct the information needed for your business and this means you should opt for a bookkeeper that can do the job correctly. It would not come to this point if a good bookkeeper has been considered in the first place.

•    The bookkeeping process is systematic. If the systems and procedures are inadequate, record-keeping will not be effectively executed. When a bookkeeper knows what his doing. Your business will be in a better position to be well-aware of cash-flow and other important aspects of bookkeeping.

Bookkeeping is an essential part of every business because without it, you will end up mismanaging your finances. It is important that you know how to choose the right bookkeeper for your small business because the effects of bad bookkeeping is beyond repair if you choose cost over quality. You will realise the importance of good bookkeeping once you notice the improvement in your business’ financial aspect.

When It Comes To Bookkeeping, Time Is Going To Be Of Essence

Are you keeping track of the time you spent on projects? Do you make it a point to record the amount of working time spent on a specific project or task? Small business employees can greatly benefit from time tracking because it does not cost a single cent. You just need to be mindful of your time so you can accomplish the task at hand without compromising on quality. There are time tracking applications made available to smart phones, desktops and tablets so you can religiously time your task and determine the exact amount of time you should allocate for each task.

If you have not yet realised the importance of a time tracking tool, here are reasons you should try one out:

•    It gives you the ability to estimate the amount of time spent on a particular task. Are you completely losing track of time as you become focused on a specific task? Have you totally forgotten about other tasks assigned to you because you are concentrating on a single task unmindful of the time spent? When you are completely aware of the time you spend on a single task, you will be able to estimate the time you need for completing other tasks. An ability to manage time without setting quality aside is a good sign of overall efficiency.

•    You can accomplish future projects in a timely manner if you learn to develop the habit of timing your current projects accurately.  Time-tracking allows you to time projects realistically and you can also plan in advance and still meet your goals without sacrificing other projects.

•    You can also improve your efficiency if you track your time because in any business, time is money. When you make it a habit to track your time, you become more responsible. You are also preventing getting side tracked by social networks that can deter you from completing your task in a timely manner. Actual time differs from ideal time. As much as possible, you should challenge yourself to finish the tasks more efficiently.

•    When you track your time, you will easily determine if you have enough time at your disposal. If there are too many tasks at hand, and you cannot finish them without getting help from other employees, the time tracker can help you identify the amount of time you need for the task to be completed. As a result, backlogs and delays are prevented.  You can also use the time trackers as means of estimating the time your outsourced employees need to finish the task.

•    A time tracker also helps maintain authenticity and integrity when it comes to invoicing. Tracking time also allows both clients and employees to reveal hidden time. These things often go unnoticed when time is not properly tracked.

Can You Take A Christmas Break And Keep Your Cash Flow Working At The Same Time

background 20126 1920As the year closes to an end, it is every business owner’s dream to welcome 2016 with a big bang especially in terms of finances. This is why setting priorities before the year ends can help you with your financial forecast. For months of doing the number crunching and analysing where your business is going, it is high time you take a break so you can meet the challenges and adjust the direction of your business. However, if cash flow is not available to fund your efforts, your growth targets for 2016 will be impossible to meet.

Trade payments have the tendency to slow down during the holidays and this is going to be an issue for business owners as untimely trade payments can leave businesses struggling especially when it comes to meeting fixed costs. As a result, New Year plans are instantly forgotten. Taking a holiday is a good thing, so long as your cash flow does not also take a holiday.

Depending on the business you own, the holiday season can either bring you financial luck or deny you of healthy cash flow. The main challenge for most businesses is ensuring that payments are received in a timely manner. Unfortunately, this is beyond the businesses’ control. There can be times when payment collection process is slowed down because customers are busy planning for the holiday. Payments are often made in January, but this could affect your supposed steady cash flow. 

Businesses need to be mindful of strategies so Christmas cash flow crunch can be minimised:

Review your previous cash flow experience: it is easy to obtain a detailed cash flow forecast if you already have an idea of your cash flow experience in the past. This way, you can prepare in advance and formulate plans that can protect your business when cash flow starts to slow down.

Make collections your top priority: Before the holiday season kicks in, make sure you have already issued invoices so customers will have time to prepare payments and you can also follow up on those who have not lodged their payment yet. Giving customers timely payment reminders and overdue notices can reduce the risk of not receiving any payments during the holiday season.

Keep your stock in check: It can be difficult to control inventory levels during Christmas but you can still put unsold stock to better use by selling them cheaply so you can continue to meet on-going expenses.

Establish a backup: A steady cash flow helps you survive the season and to maximise your cash flow, make sure you reserve your cash into a high interest savings account.

Tighten your payment terms: You can also improve seasonal cash flow by testing your payment terms. You can either offer early payment discounts to encourage timely payments or negotiate full or part payments ahead of time.

Seasonal bumps are inevitable, but they can definitely be controlled with some effective strategies you can use such as managing unpaid invoices and fixing expenses with the use of debtor finance. While taking a well-deserved holiday is a good way to start fresh, you can throw your worries away once you are assured that your working capital is still intact.

Never Become A Hapless Victim Of Another Costly Bookkeeping Disaster

Bookkeeping and accounting fees can cause small business owners to tighten their belt, but imagining the vast amount of money you need to spend to repair a bookkeeping mistake can make rethink about skimping on bookkeeping cost. Any business owner is left with no choice but to submit for the business operation to continue.

A business that is competitive and you cannot afford to miss out on grabbing every business opportunity that comes your way. You know that customer loyalty is measured by how you deliver their needs. You know for sure that everything is on the right track until you open your email. Just the thought of opening your email fills you with excitement and fear. You are wondering where the email came from then lo and behold, an email from the ATO.

Although you have not completely gone over the email you received from the ATO, you know that something is not right. Your suspicions have been confirmed as you read the email. To make matters worse, the letter has already been forwarded to your bank by the ATO and they have already been advices of the non-payment. Nothing can be more horrifying than discovering that your bookkeeper is no longer doing what they are supposed to do. You know what is going on and you are waiting for the bank manager to give you a call.

If a small business owner no longer has the ability to pay debts, insolvency and bankruptcy are not far from happening. The bad news is, these things can be beyond the business owner’s control. Financial loss can be due to a number of reasons. For instance, if your business partner is experiencing marriage break down, it can definitely result in business mismanagement and cash flow shortages. However, a business owner still has the option to get out of this difficult financial situation.

A business can be compared to driving a car because you know to keep an eye on the dashboard and avoid driving too fast or too hard. It is also your responsibility to meet your financial obligations to keep the ATO at bay.

The Following Are Alarming Indicators That You Need To Pay Heed To Your Financial Activities:

• Your superannuation payments and GST are always falling behind their schedule.

• Wages, payroll and contractor’s bill are no longer met.

For A Business Owner To Ensure Financial Stability, A Bookkeeper Must Do The Following:

• Ensure that invoices go out promptly and reminder notices are received in a timely manner to avoid making late payments and incurring penalties.

• Create a system that provides bookkeepers the ability to highlight late payers as soon as they are falling behind payment schedule. Bookkeepers can also follow up on late payers the next day.

• Add terms on invoice so that collection costs waived once recovery service becomes a requirement.

A business owner must also perform their obligation so matters will not be taken to court. There are various options available to business owners in settling their unpaid debts. They can call the bank manager, call ATO, arrange payment plan, prepare budget and reduce head-count before the situation becomes worse.

Reading A Profit And Loss Report

stock exchange 921605 1920The profit and loss report is one of the essential reports that most business owners hold on to in order to find out which direction their business is heading. Going over the numbers require accuracy in interpreting data. There should be no room for mistakes because bookkeepers base their recommendations and suggestions on the report. In essence, a Profit and Loss Report is a determining factor whether a business is making money or losing it. While most business owners leave this task to the bookkeeper, there are still some business owners who do not know understand the report. If you are heavily relying on your bookkeeper without taking time to look at the report, it could only mean that you are not actively planning your business or budgeting.

Interpreting numbers is a bookkeeper’s second nature, but to some business owners, they are often dazed and confused because all they know is that these numbers are only meant for forecasting where there business is going. When figures are good enough, it is easy to overlook some other details. Unfortunately, business owners are missing the point because financial reports offer more than just the figures. They are also crucial to making business decisions that can contribute to the business’ success. If you fail to regularly monitor the performance of your business, it may not take a while for you to discover that your business is already losing money.

Income

The Income refers to the total of sales or invoices you have invoiced over a selected period of time. This amount is also GST exclusive and considered as accrual based. Keep in mind that the Income amount does not include investment income as this falls under a section known as ‘other income’, which is found on the bottom of the report. Your income is also referred to as ‘turnover’.

Cost of Purchases or Goods Sold

The Cost of Purchases and Goods Sold refers to the total of all the expenses you have incurred. These expenses have directly contributed to your income. The purchases are the inventory items that the company has purchased and sold. The Cost of Goods Sold are the items for sale including the freight charges for the items and the costs incurred to bring the purchased item into a saleable state.

Gross Profit

The Gross Profit is the income less the Cost of Goods Sold and purchases. As a business owner, you will be able to understand the markup percentages by referring to the gross profit. In a report, this is expressed as a percentage of income. 

Expenses

Aside from the Cost of Goods Sold, the expenses also provide you figures of other business expenses. The expenses are categorised according to your industry and it includes operating expenses such as rent, power, telephone and many others.

Net Profit or Net Loss

The total net profit or loss refers to the total of income, less cost of goods sold or purchases less expenses. The business makes a profit if the figure is positive. A negative figure indicates that a business is losing money.

Another important note to consider is that the profit and loss report is an indicator of the amount of money you have in your bank account. Your profit may be high, but your cashflow is low. However, you should also keep in mind that a healthy cash flow does not necessarily mean healthy profit.

 

Signs Your Business Needs Help With Budgeting

Spending is necessary in every business, but it should come with a plan. The failure of assessing your spending habits may result in getting a zero balance in your bank account. The rule of thumb is to spend the least amount of money while obtaining the best possible return. This is where budgeting comes in. For you to manage the financial aspect of your business, a cost-effective way of using your money is a must.

You may not be doing things right if:
Bills Are Not Paid In A Timely Manner 

While it is acceptable to miss out on accomplishing some items on your to-do list, not paying important bills is a different story. Set aside money for paying your bills and budgeting is a good way to prioritize your expenses. It should start with the most important payment obligations such as tax payment. If you have to make credit card payment, you should keep a budget for funds are ready to use again.

Your Business Is Showing Clear Signs Of Overspending 

Your business is making a profit if you earn more than you spend. However, this does not mean refusing to spend money even when it is already considered necessary. It only means spending your money on necessary expenses and budgeting is going to help you monitor your expenses. 

You Have A Long List Of Unresolved Obligations 

It is time to rethink how you spend if you always find yourself depleting your funds. A long list of unresolved obligations only means that something is not right with your spending habits. You should know the difference between going out of business and growing your business. Your creditors and the people you are doing business with may lose faith in you, so you need to make sure that your problems are resolved. 

You Have Trouble With Your Petty Cash 

If your account ends up unbalanced at the end of each week, there might be part of your expenses that you need to review or re-assess. If you cannot identify what the problem is, you might be having problems reconciling your petty cash with your business accounting. The lack of budgeting can leave your financial activity in chaos. Not resolving issues with your petty cash only means that you have no idea about the amount of money you have. You also allow your spending habits to wreak havoc on your overall financial status by overspending. Make sure you are in control of your petty cash and never take money out of the rest of your budget if it is intended to cover items you have previously provided.

Poor financial management can increase the likelihood of losing your business. There are businesses that are forced to close because of not keeping an eye on the expenses. Ignoring payment obligations and spending money on unnecessary items can create a serious impact on your business. If you cannot properly identify where the problem lies, a bookkeeper can teach you wise financial management. Closely monitoring your financial activities helps you identify problems before it gets worse. You will also be able to know if changes should be made with your spending habits.

Never Make The Same Financial Mistakes Again

accounting 761599 1920Even if you have just opened a small business, it does not necessarily mean that you cannot survive or emerge victorious in your chosen business niche. While it can be a series of trial and error, learning from your mistakes will hone your business management skills. Among the various business aspects, the financial aspect is often the target for mismanagement. A simple mistake such as overlooking the correct details on a statement can create a deleterious effect on the outcome of your finances. Before problems with your record could get worse, you should be careful with your financial activity and avoid committing these mistakes:

1. Not Taking Feedback Seriously

Getting advice or feedback from your bookkeeper can hurt your ego if you have not prepared for it, but as a business owner, you need to take your bookkeeper’s opinion especially if you are still trying to gauge your business. The feedback from your bookkeeper can help you take the right direction if you listen carefully.

2. Not Keeping The Receipts

If you are already familiar with your financial activity and you have estimated your expenses, throwing away your receipts seems like a natural thing to do. This may not be an issue at first, but come tax season, you will realize their importance. Never toss out receipts as they are part of the record keeping process. Save them in a file or give them to your bookkeeper for safekeeping.

3. Not Focusing On A Niche

Your business will not prosper if you do not consider sticking to a niche. Marketing is indeed expensive. This is why you need to spend your marketing budget in such a way that will reap positive results. Make sure you only focus on a niche that your product can satisfy. Never concentrate on people that are far from becoming your target market because you will not only waste your time but your money as well.

4. Not Giving Importance To Making A Budget

If you go to a battle unarmed, you are most likely to lose. The same is true when opening a business. You need to have a plan of action so you can calculate the adjustments you need to make. You won’t know the direction you are going to take if you don’t have a financial road map. You will also find it difficult to measure or track your progress.

5. Failure To Hire A Bookkeeping Professional

For business owners who have completely understood the nature of their business, they will sure realize the importance of a bookkeeper in leading the business in the right direction. New business owners are often concerned about the service cost, but you should also pay attention to quality. Choose a good bookkeeper and never fall prey to those who offer the lowest price, the result may not be desirable.

6. Not Analyzing Your Start-Up Costs

Your initial capital is important when starting a business. If you have not analyzed your capital, you can wreak havoc on a solid operation. You should keep in mind that positive cash flow does not immediately take place. You need to observe and make a wise investment  so your business will have a positive direction.

Signs You Need To Consider Hiring A New Bookkeeper

IMG 6960 2A bookkeeper will always be considered necessary in every business especially if you are managing a fledgling company. Aside from making your financial activities more sensible, they are also considered your partner in running your business. There are different aspects of your business that you need to keep an eye on and in your absence, your bookkeeper should be able to keep track of your budget or cashflow so your business' financial aspect remains intact.  

However, there are problems associated with hiring a bookkeeper especially when their presence does more harm than good. Have you ever found yourself doing the task that a bookkeeper is supposed to carry out? If you think that your business operation is interrupted because your bookkeeper is unable to achieve your business' primary goals, it can already be a sign that you and your bookkeeper need to part ways. 

Signs You Need A New Bookkeeper  

1.Your bookkeeper fails to deliver financial reports and other forms to you on time. 

One of the reasons you hired a bookkeeper is for you stay on top of your business' financial aspect. Your bookkeeper does not make the entire process easier for you if they don't deliver timely reports. Find out if you contributed to the delayed submission. Have you sent the reports they need on time? If all things that the bookkeeper needs are made available to them before the deadline, you may need to think twice of keeping the same bookkeeper. While these reports require ample time to be completed, being consistently late means you need to consider another person for the job. 

2. Your bookkeeper is always busy or out with other clients. 

A bookkeeper that has strong commitment to your business should be available whenever you need to engage their service. There are days when you can be very busy and you need financial reports done ASAP. However, when your bookkeeper is nowhere in sight, you may want to choose someone that can devote his or her time for your bookkeeping task. It's time to bid your current bookkeeper goodbye if your bookkeeping tasks become the least of their priorities. 

3. Your bookkeeper does not take time to explain financial reports. 

As a business owner, you have the right to understand your financial reports and your bookkeeper should schedule a meeting to present the reports. If you are being denied of your right to obtain information of your business's financial aspect, how can you be confident that the figures on the report are correct? You don't have any assurance that ATO also gets the right information and this can spell trouble on your part.  

4. You receive repeated notices from ATO.

If you are constantly receiving notices from ATO, this only means that your business has not been taken care of correctly. This is considered a serious warning sign because if notices become very consistent, you may have to deal with bigger problems with ATO. You might also be flagged as a repeat offender and this could mean penalty on your part. 

5. Your bookkeeper fails to return your phone calls. 

Do you always find yourself in a waiting game when trying to check in on your bookkeeper? If your bookkeeper never returns your phone calls even when you left a message, this can be a sign that he is no longer interested in working for you. While there can be instances when employees encounter circumstances beyond their control, it is a different story if this happens regularly. 

Reasons Good Bookkeeping Is Necessary

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A successful business follows a bookkeeping practice to ensure that payments are made in a timely manner and all financial activities are recorded properly. There's bad bookkeeping and there's good bookkeeping. One thing that separates bad bookkeeping from good bookkeeping is the system. Even if you have a small business, it is not a valid reason to not pay attention to your bookkeeping task. It may appear to be the most trivial task, but it can be the most critical to your business especially when you start auditing your finances. 

It takes a large chunk of your success and a lot of things needs to be undone if something goes wrong. In every business, you are expected to be in complete control of your financial activities. You don't just make a mental note of your expenses, budget and cashflow because you are required to keep a record. You may not fully appreciate the importance of good bookkeeping but you will once your business starts to grow. 

Reasons You Should Maintain Good Bookkeeping

It improves your tax return.

One of the dreaded obligations of most business owners is keeping their tax payments up to date. This is why many of them rely heavily on the expertise of a bookkeeper to ensure that everything is in proper perspective. Unfortunately, business owners often fail to realize that just integrating bookkeeping into their business is not enough to keep it in tip-top shape. You have to maintain organized records that can be easily analyzed when needed. 

It provides audit protection.

Having a separate checkbook should be regularly observed because it can provide you audit protection. More likely than not, ATO does not allow a great number of expenses, which usually take place when your personal and business accounts are one and the same. 

It substantiates the corporate veil.

A separate checkbook gives you the ability to recognize that the company is its own unique entity. You also avoid mixing your personal and business funds with a separate checkbook. 

It encourages tax savings.

Nothing can be more frustrating than falling behind tax payments. This can be due to a number of reasons and one of which the lack of ability to provide an accurate record of your finances. This can be very stressful on your part especially if you heavily rely on your bookkeeper to do the job without checking the details of your books. 

It makes record-keeping less stressful. 

When your records are disorganized, it seems like you are always try to beat the deadline. You end up juggling various tasks but none of them are accomplished. There's one important aspect of your business that you might have taken for granted. If bookkeeping is the least of your priorities, you need to change the way you manage your business. Good bookkeeping is as equally important as other aspects of your business. 

It helps you make the right decision.

Accurate records are going to be important when making a crucial decision that is related to your business. You can cloud your judgment and make poor decisions if you are being presented with records that you find difficult to understand. You can't be a good business owner if you can't get your bookkeeping task straight. 

One Task That Most Small Business Owners Dread

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As a small business owner, you need to fulfill your responsibility in ensuring that your business is in tip-top shape. You need to hire the right employees, keep your business finances in order and create a website that potential and existing customers can turn to if they need to buy your product or engage your service. Without a doubt, you are ready to roll.

Unfortunately, there is still one essential element in managing your business that should never ever take a backseat regardless of priorities. While bookkeeping can take so much of your precious time especially if you don’t have any extensive experience dealing with quickbooks and other bookkeeping related tools, every task that involves bookkeeping seems complex.

Although bookkeeping can be everyone's least favorite task, this can play an important role in running your business. Bookkeeping is unappealing to small business owners because of the basic practices that can still be foreign to someone who does not have an accounting degree. You will need to learn the ropes before you can breathe a sigh of relief when deadline for submitting financial reports approaches. If you are new at bookkeeping, it can also be time-consuming and making mistakes can't be undone by simply changing figures. The painful part is that it can be costly.

How to make bookkeeping easy for business owners?

You don’t have to love math to master your business’ bookkeeping side. You just have to employ some simple techniques: 

• Take a short course on bookkeeping basics

Bookkeeping can be overwhelming when you don’t know anything about it especially if you hate numbers. However, a small business owner should make the effort to know what bookkeeping is all about so you know where your business finances are going. A short day course can give you long term benefits.

• Use bookkeeping software

When it comes to balancing the bank statements, you can't do all the work because it will sure be a tiring job. Instead of doing the job by hand, try using reliable bookkeeping software that allows you to enter the financial statements in a jiffy. It is best to use software that allows you to link your bank transactions automatically for real-time monitoring.

• Keep records organized

Keeping accurate financial records is a sign of good bookkeeping. It starts with developing good work habits and ensuring that you keep your company workflow in check. Keep receipts in one folder and be sure to label it to avoid confusion. File them on a monthly basis and store them in one place.

• Get a reliable bookkeeper

Even if you are running a small business, hiring a bookkeeper should not be set aside. A bookkeeper will be responsible for setting a workable system that your company can follow. All you need is a basic understanding of the system so you know how the process works. 

You can’t promote business growth if you don’t pay attention to small but essential details of your business. This is why giving importance to bookkeeping is a must. A lot of businesses have failed because of not paying attention to the business’ financial activities.

Reasons Small Business Struggles With Bookkeeping

entrepreneur 696976 1280It is easy to pay little attention to bookkeeping when your business is going well. Why would you still go into the smallest details of your business when you can focus on more important things? Any business owner can hover on the brink of disaster with this mindset. Your business’ bookkeeping task does not end where your success begins.

In fact, you can’t take shortcuts on other tasks such as selling without prioritizing bookkeeping. You can overlook financial activities but once these errors take their toll on your business, it is already too late for you to realize that you have already made a costly mistake. If bookkeeping stays in background, you won’t be able to determine the factors that have driven the success in your small business.

Avoid These Bookkeeping Mistakes:

Failure To Maintain Records

A small business can swim in its pool of success and just watch the bookkeeping task take a nosedive. As the temporary allure of your business starts to fade, bookkeeping starts to resurface, but this time, there are numerous questions that quickbooks can’t provide any answers to. Record-keeping is important in every business. Even if you have already tasted the sweet success of your business, this does not take the glamour out of bookkeeping. Make sure you keep all receipts in a safe place as you will need them in the future.

Unaware Of The Amount You Spend For Your Business

It is perilous to every business to assume that there is still enough cash without budgeting your spending. Keep in mind that you are spending money to run your business on a daily basis. If you are complacent that you have sufficient money at your disposal, unable to keep your financial activities in check can make you spend more than you know. When budgeting the money for your business, make sure you separate them into 4 categories: 1. Fixed expenses; 2. Prospective income; 3. Paycheque-allowance; 4. Variable expenses. You should give priorities to needs more than wants.

Spending Rather Investing

There’s a difference between spending and investing. When you spend, your business does not obtain any benefits from it as you just let your money go out the window. On the other hand, investing your hard-earned money can help you reap long-term success. While it can be inevitable to spend, make sure that the benefits still outweigh the cost. Although the balancing act can be challenging, making a sound judgment usually does the trick. If you need to buy office supplies, think first if these are necessary to improve your business’ quality of work.

Not separating your business bank accounts

You can easily lose track of your cash reserves when you don’t separate your business and personal bank accounts. If you continue to follow this practice, you may end up using all the money for your business and you have nothing left to pay for your living expenses. You can avoid confusing your personal bank account for your business bank account if you pay your business expenses from a business credit card. There should be a credit limit so you can control your cash flow. It will also give you the ability to be more flexible.

5 Signs Of Fraudulent Payroll Activity

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When it comes to your business’s financial activity, accuracy is important because it is not just a simple number crunching. However, your keen eyes may not always take notice of payroll irregularities and because you’ve put so much trust in the people in charge, you become oblivious to the fact that something is not right. Payroll fraud is very common these days. The execution may be different but it all boils down to the same intention. Being complacent is not an option especially if you run a business with hundreds of employees. You just cannot afford to ignore erroneous entries on payroll reports especially if this has taken place numerous times. When payroll fraud takes place, undoing things can be such a painful and costly process.

5 signs you need to put a stop to fraudulent payroll activity:

1. Sharing logins with other employees.

The information in your payroll system should be treated with confidentiality. This is the reason logins are created. However, if your employees are sharing logins or using obsolete logins, this activity is already questionable. Make sure you have the payroll staff delete your old login to ensure that no one will use it. If you suspect that someone is trying to access your account, request a password reset. 

2. A drastic change in regular masterfile.

It is also a cause for alarm if you see the masterfile changing information at a rapid rate. This should be investigated especially if the essential information such as bank details is not what you hoped for. If changes need to be made, they have to be subject for the manager’s approval.

3. Access to payroll system outside business hours.

When payroll cut-off is getting near, you feel as though there is so little time but so much work to do. If someone in the payroll department attempts out of hours access without your permission, this activity may already be in question. If your payroll staff needs to access the payroll system outside business hours, it needs to be audited.

4. Increasing numbers of casual employees.

There are companies that may often have more casual employees than regular ones and even though this is not a tell-tale sign of fraudulent activity, casual workforce is often used to execute payroll fraud. It is important that you pay more attention to your business if the percentage of casual employees is much higher than your regular employees.

5. Inconsistent payroll reports.

You should also be suspicious if there are some obvious discrepancies in the payroll reports. These reports often undergo extensive scrutiny before they are finalized and if this process is by passed, then you know that something is just not right. It is best to outsource someone that can check the reports on a monthly or quarterly basis. More serious problems such as payroll fraud can be effectively avoided this way.

Payroll fraud needs to be taken seriously as it creates a serious impact on your business. If you suspect an employee engaging in fraudulent activity, do not hesitate to conduct further investigation. Payroll fraud prevention lies in your hands. While you cannot immediately put a lid on the problem, you can prevent more serious issues from happening when you monitor payroll activities closely.

The Future Of Bookkeepers: Are They Becoming Obsolete?

 

grid 725269 1280With the bookkeeping software stealing the limelight, is this already the end of bookkeepers’ career? For sure, every business owner relies heavily on the modern advancements of technology to accomplish daily tasks quickly and easily. However, bookkeeping software is not the be-all and end-all of every business transaction. No matter how advanced the software in carrying out bookkeeping tasks, they still have glitches that can take a large chunk of your time if you choose to fix these errors. These days, people rely on real-time information and this is one of the benefits that cloud software provides. The information you need is available right off the bat and the process isn’t time-consuming. 

The allure of accessibility, convenience and speed often make bookkeeping software more attractive to business owners. Gone are the days when you have to check a pile of receipts and enter them into the database manually. Everything is replaced by a microchip that does all the bookkeeping jobs instantaneously. However, the success of a company does not just depend on bookkeeping software and with that being said, a reliable bookkeeper will still play an important role to the company. In fact, software and bookkeepers make a great tandem. You just have to know how to play your cards right.

How to utilize bookkeepers in a world of modern technology?

Just because entrepreneurs are relying heavily on bookkeeping software does not necessarily mean that businesses are formally saying goodbye to bookkeepers. In fact, a bookkeeper can still continue to stay in the game so long as the skills required are present.

• Create a solid understanding of bookkeeping fundamentals.

If you only have basic knowledge on bookkeeping, there is only a slim chance that you will emerge victorious in a stiff competition. Attempting to step out of your comfort zone and do more than just gaining knowledge on QuickBooks can help you acquire an edge. Take it a step further by obtaining useful information on debits and credits. This is going to give you a great advantage especially when you need to fix data that have been incorrectly imported.

• Find your niche and develop it.

Instead of trying your luck on mastering various products, focus on a single product so you will only deal with a single standardized process. This way, you can work on a specific niche and ensure remarkable results.

• Participate in the community of bookkeeping technology.

If you are looking for a valuable resource that can help improve your skills and have an edge in spite of the proliferation of bookkeeping software, get involved in a community where views on bookkeeping technology are shared. When you are in the loop, you will remain updated of the principles of bookkeeping that you need to stick to.

• Explore cloud bookkeeping tools.

Searching for bookkeeping tools that might be helpful to your clients and developing a system where you can minimize errors or glitches on these tools are a must. You can also ask feedback from your colleagues so you will have an idea on the tools’ area for improvement.
You don’t need to be left behind even when bookkeeping technology continues to soar high. Regardless of the competition, being keen on seeing the loopholes and acquiring the ability to foresee future problems can still make you relevant to the world of bookkeeping technology.

Reasons Oral Advice Must Be Documented

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When oral advice is given based on professional standards, documenting it may be considered unnecessary. However, clients who fail to document oral advice may suffer its deleterious effect in the event of liability claim. Without the documentation, the defense will find it difficult to support any claims. Clients rely heavily on expert advice, but if this is not documented, it is as if the conversation had not really transpired. It will be impossible for the client to mitigate disputes especially when it comes to liability claim. When both sides don’t depend on oral advice, the discussions will be kept in place. 

Essential elements of documenting oral advice:

When clients have some important questions lingering in their mind, advisors will provide information for the enlightenment of the client. This is where written correspondence comes into play. While general questions only require basic notes, some information must be present to ensure that the discussion really took place.

When documenting oral advice, make sure it includes the date that the discussion took place and the names of the persons involved in the discussion. The specific advice that the solicitor provided must also be included in the documentation. The additional items that must be present in the documentation are the appropriate disclaimers, recommendations, tax and accounting considerations and the details of client follow-up. 

Essential things that must be taken into consideration

More likely than not, the client will receive unsolicited advice which is generally work-related. This may be about the work flow enhancements or improvements on record-keeping. The advice is very general and firm working papers are enough to support such an advice.

There are also instances when the client receives more specific advice which can affect business operations. In this case, the client needs to be detail-oriented. If there were allegations that the advisor or accountant failed to provide the right advice to the clients, the documentation will serve as a strong defense.

There are also some special considerations for consulting engagements that must be put to mind. Some examples of consulting engagements include discussions between the solicitor, client and sometimes, third parties. It is definitely the client that can benefit from these engagements as they are the ones that will be held responsible for making the final decision and executing plans.

As much as possible, the consultant should only provide the recommendations or conclusions to the client alone. This way, a third party will be deterred from relying on the information that was provided for their personal interest. For consulting engagement working papers, the date, parties involved and the things discussed by all parties must be included. If specific oral advice was given, it should be confirmed in a written report. There is a huge difference when these are included in the documentation. Any discrepancies will be prevented and disputes will be corrected before worsening the problem. 

For tax advice which revolves around providing information on filing obligations, penalties, interest charges and deadlines, everything must be documented. It should show the advice provided to the client and the negative impact in case no actions are taken.

Five Bookkeeping Tips Every Business Owner Must Keep In Mind

Keeping financial activities in check should be the best practice every business owner should follow. You just can’t run your business without following a system. Otherwise, it will be in complete chaos. Imagine running a business without any specific system in mind. You’ll increase the risk of losing important financial details and get into a serious trouble with the Australian Taxation Office (ATO), which is something any business owner wouldn’t want to happen.

Your business should have a long term goal and simply keeping it running and wait for things to happen at the end of the day is not the way it should work.

How do you maintain a steady cash flow and help your business stay on track?

1. Keep a record of deposits.

The benefits: It helps you prevent paying your taxes using money that is not obtained from your business income.

The steps: The first thing you need to do when recording your deposits is to choose a system that will straighten out your financial activities. It can either be bookkeeping software or a ledger. Regardless of the methods you use, it should provide you detailed information of your financial standing including the deposits you made all through the year.

2. Make a list of your expenses.

The benefits: You are more likely to prevent missing some tax write-offs and pay your taxes on time.

The steps: Auditing your expenses is a good habit that you should develop because it puts your business in proper perspectives. When going out on a business trip, see to it that you keep a notebook to record your business expenses on. With this simple habit, you can be sure that you remain in the loop with your business’ financial activities.

3. Plan major expenses carefully.

The benefits: You are well-prepared for bigger business opportunities that come your way even if it means spending vast amounts of money.

The steps: Make it a habit to plan in advance so you will know how much you should spend for some business improvements that you want to consider. You should also keep in mind that every business will experience peak and off-peak season. However, if you have planned ahead of time, major expenses will not worry you.

4. Store receipts and invoices.

The benefits: Cash flow will remain intact and you will reduce the risk of falling behind your bill payment schedule. 

The steps: Assign a person in your organization that will be responsible for tracking your billing. Make sure you keep track of your invoices and make a phone call to ensure that your payments have been settled in a timely manner. Invoices should not be confused for payment. Just because you have sent out an invoice does not necessarily mean you will not incur penalties or charges for late payment. 

5. Prepare money for paying your taxes.

The benefits: The ATO will not impose interest if you pay your taxes on time.

The steps: Set aside a portion of your business income for paying taxes. Don’t just make a mental note of tax deadlines as you might run the risk of forgetting them. Keep a note where you can easily retrieve it and make payments on or before the due date. Never underestimate the consequences of late payments because it can take its toll on your business sooner than you know.

­ Questions? Give Andrew a call 0450 605 592

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