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It’s all in the software
A good accounting software package will monitor your income and outgoing financial activities, generate financial statement and cash flow, and offer invoicing and receipting. Make sure your accounting package offers Pay-As-You-Go (PAYG) and Single Touch Payroll (STP) capabilities to save you time and headaches with each pay period.
Pro Tax Tip: The cost of your accounting software subscription can be claimed as a tax deduction.
Don’t mix your bank accounts
Most businesses start small and many small business owners fall into the trap of using their private bank accounts for both private and work use. Things can get messy. When it comes to keeping track of your finances and tax, it’s best to have a dedicated bank account just for your business. Some small business owners open a third bank account for GST and other tax obligations.
Pro Tax Tip: Your small business might be eligible to immediately deduct capital assets instead of depreciating them over time. Make sure you keep your paperwork up to date so you keep track of capital expenses.
Keep track of your real time revenue and expenses
Good decisions are made based on real time information. Tracking and organising expenses and revenue in real time will enable you to see an accurate snap-shot of your business strengths and areas for concern.
Your daily bookkeeping tasks should include:
- Entering transactions in your cash book
- Processing bank reconciliations
- Prepare invoices
- Enter purchase invoices
- Prepare profit and loss, balance sheet and cash flow statements.
Keep valid records
Keeping the right records is a high priority, especially when it comes to tax. A good bookkeeping system will help you track financial queries as well as provide proof of expenses when it comes time to claim tax deductions. The ATO requires you to keep business records for 5 years, and in some cases 7 years, to prove your expenses. If you don’t have proof, you won’t be able to claim tax deductions.
Pro Tax Tip: Electronic records can be kept if the copy is a clear, a true representation of the original and in English. Backup copies should be saved externally in case of data contamination and damage.
Are you on top of your Bookkeeping?
Business owners are in business to make money, not to spread themselves across time-consuming administrative tasks. Many small business owners find their breaking point at three hours or more of paperwork a week. If you find yourself wondering where your day went pandering to a constant stream of ordering, invoicing and issuing receipts, the time may have come to consider outsourcing your bookkeeping requirements.
Take The Next Step
Are you a sole trader with a gross revenue of less than $250,000? Get your bookwork in order for half the normal price. Save over $1,000 in bookkeeping fees. Normally $200 p/m, now only $99.
Visit the ITP website for more information.
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