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5 Bookkeeping Habits Business Owners Should Adopt

5 Bookkeeping Habits Business Owners Should Adopt

As a small business owner, the idea of hiring a bookkeeper may sound like an additional expense, but in the long run, having a bookkeeping professional can save you from any business disaster. A savvy business owner embraces good practices to ensure that the business grows steadily. Here are five habits that can give your business a strong foundation:

Map out a bookkeeping system

If you want to get the right results, you need to put a proper bookkeeping system in place. Any business, regardless of the size cannot afford to be poor at bookkeeping because it eventually creates a snowball effect. You may think that your financial health is still great and you decide to grow your business, but when banks and investors try to check your financial reports, it clearly shows that business expansion is far from happening. Be keen on choosing bookkeeping software. Do not be tempted to purchase software loaded with features if they cannot meet your business needs. 

Create financial reports

Reports such as balance sheet, cash flow and profit and loss are all important in repositioning your business. This is why if you have a bookkeeping system that regularly updates and reconciles, you will no longer have to create routine reports. Financial reports are going to be crucial to the decision-making process. If you do not get accurate reports, the decision you make can have a long term effect on your business. 

Keep your receipts

When you throw away receipts for the items you purchased, it is easy to lose track of your expenses. You may not realise the impact of not keeping all receipts until you decide to pay your bills as your cashflow is already suffering. Make it a habit to keep and file receipts correctly. This way, you will know the amount you are spending for your business. Books may not balance out if you failed to keep a record of these expenses. 

Communicate with your bookkeeper

Hiring a bookkeeper does not mean you should go completely hands-off. It is still important to keep an eye on your bookkeeper so you will know if books are regularly maintained. If you leave everything to your bookkeeper, you will never know if there are any discrepancies or fraudulent activities. You still need to check if your financial reports are regularly updated. Communicating with your bookkeeper will also help you make sound decisions by giving you an overview of your financial health and business performance. 

Why Embrace Cloud Technology?

Why Embrace Cloud Technology?

Cloud technology seems to be promising for businesses that are still embracing manual processes. For one, it is capable of reducing manual work without compromising quality. With its laser-focused features, every business can be sure that nothing is missed out especially when it comes to providing one of a kind solution to every bookkeeping woes. Spending too much time on paperwork is bad for the business because instead of focusing on other more important tasks, you are glued to finishing one task-bookkeeping. If you are still in doubt of what cloud technology can do for you, here are some benefits that many businesses have already reaped:

1. Mobility

Today's technology is fast-paced and every business needs to keep up. If you are still chained to your desk, then you are missing out. You need to switch over to cloud technology so it will be easier for you to access essential files without necessarily staying in front of your computer. Your mobile device and cloud will make it possible for you to check your balance and track your expenses at any given time, regardless of your location so long as there is an internet connection. 

2. Easy collaboration

When was the last time you have checked your files? Are there any discrepancies? Has your bookkeeper been informed about the irregularities? The problem with manual process is that it takes away the freedom to collaborate with your team when you have ideas to share or when you need to ask for their suggestions and recommendations. Cloud technology makes it easy for you to collaborate so you can go over your business performance and financial standing. 

3. Online invoicing

Chasing clients who have not paid you can be a nightmare because it will be an unending cycle. You will never know who has made a payment and who has not. You will need a dedicated bookkeeping system that will enable you to keep track of your receivables. Online invoicing will make it easy for you to know who owe you money. You will no longer waste your time tracking down late payers this way. 

4. Real-time reports

An up-to-date report is important when deciding whether you should grow your business or not. There are key aspects of your business that heavily rely on your financial standing. If you do not get real-time reports, there is a great chance you will make a bad decision, which you might regret in the end. Cloud technology gives you full access to your financial data so you will easily know which direction your business will take. 

5 Ways To Protect Your Business Records From ATO

5 Ways To Protect Your Business Records From ATO

Many business owners consider audit a nightmare when there is no proper bookkeeping in place. These businesses are often under ATO's microscope and if there are any discrepancies on the records, ATO can either question financial reports. Bookkeeping may just be a tiny fraction of a business owner's day-to-day activities, but it creates a serious impact, if it is not done right. 

1. Maintain proper records of your income

Although there are many ways you can keep track of your expenses and income these days, such as using bookkeeping software, keeping proper records are still essential because this practice can help you trace your transactions. You should also have a record of your loan and bank statements, copies of expense receipts, canceled checks and other business-related transactions. These records can either be maintained electronically or on paper. You can also use software solutions if you wish to automate record-keeping. The ATO may require you to keep a copy of your tax returns and other supporting documents for a of five years. 

2. Choose a reliable software system

As your business grows, keeping track of your income and expenses can be a bit of a challenge let alone reconciling your bank accounts. This is why you need to have a reliable software system that generates report in real time. The software is essential because it helps you to determine how your business is doing. If you are unsure of the software you are going to use, it is imperative that you consult with a bookkeeping professional. 

3. Document your income

You will also need to maintain a separate bank account intended for your business. Avoid mixing personal and business income because this can get you into trouble in the end. Keep in mind that your business income will be used for paying employees and other expenses. You should also report all of your income because an auditor will add up all the deposits you made and compare them with the total income you declared. 

4. Audit your books

While you may have a dedicated bookkeeper and accountant to help you keep track of income and expenses, you should not forget to self-audit your books as there are will questions asked when preparing your tax return. Your Balance Sheet and Income Statement are going to be important for filing your tax return. Make sure they have all the necessary information. The accountant or bookkeeper must know and understand the adjustments made. 

5. Deduct necessary expenses

If you are going to deduct an expense, make sure that it is both necessary and ordinary to your business. This means that your expenses must be accepted in your business. You should also make sure that your business expenses are separated from capital assets. It is also necessary to separate personal expenses from business expenses. 

5 Reasons Ignoring Bookkeeping Is A Costly Mistake

5 Reasons Ignoring Bookkeeping Is A Costly Mistake

Even if a fledgling company has not spread its wings, setting aside a budget for bookkeeping services is important because it helps you keep track of your expenses and gives you access to financial reports. You cannot afford to ignore the services of your bookkeeper because aside from missing payments, you may also incur penalties, which may hurt your business. 

If you have not thought about hiring a bookkeeper yet, here are 5 reasons you engage a bookkeeping service:

1. Pay the bill on time

Without a doubt, running a business is a time-consuming task. So many things, so little time. No matter how to try to focus on bookkeeping, you will always get sidetracked by other business obligations. Since there is no one to remind you of your payment obligations, overlooking it seems easy. A bookkeeper reminds you when your bill is due. With access to your online account, they can even make a payment themselves while you take care of other business responsibilities. 

2. Easily track multiple income sources.

Landing a contract is a rewarding experience. However, fun ends when it is time to create invoices and enter payments. You need to operate a business without taking bookkeeping for granted. These days, software programs make it easy for you to track multiple income sources and make entries for you. As a result, reports are generated in real-time so you will know the financial standing of your business. 

3. Stress-free payroll management

Payroll management is the most challenging part of operating a business. It involves checking deductions and payments, which must be properly entered to prevent any discrepancies during tax time. 

4. Generate and access reports when needed. 

Financial reports must be generated on a bi-weekly basis, but there are instances when business owners choose to generate reports on a weekly basis. Reports are important because they tell you about the performance of your business. Reports also help you identify problems before they even occur. 

5. Prevent additional interest payments 

Bank reconciliation is often ignored, but it is an important part of your business. A bookkeeper must handle accounts receivable and accounts payable so you will know what your real balance is. This way, you can avoid making a mistake such as writing a check when not needed. If you write a check for more than what you have on bank, the can result in additional interest and overdraft fee especially if you have outstanding debts. A bookkeeper helps you save both time and money even in operating a small business. 

5 Essential Tools For Bookkeeping

5 Essential Tools For Bookkeeping

Bookkeeping is a major task that is often overlooked because of other business obligations that need to be prioritised. Since bookkeeping involves generating financial reports, the numbers have to be accurate. These days, small business owners living in the era of paperless have realised how easy it is to keep books in check. Thanks to the advanced tools that help every bookkeeper to share files, keep track of payment dates and many more. There are five essential tools you need to make available to bookkeepers:

1. Bookkeeping websites

Have you ever wondered when your tax payment due date is? You may still be thinking you are ahead of your payment schedule, but the truth is you are almost falling behind. ATO's website will make it easy for you to keep track of your due dates so you avoid late payments. It also features tips to ensure a healthy business and financial performance. 

2. Google Drive

Saving files using your desktop programs may not be a good idea because once the computer crashes and you have not backed up the files, you will need to start from scratch to finish the job. Google Drive, Dropbox and other popular cloud storage options will make it easier for you to store and retrieve files. Even if you are on a different device, you can still access bookkeeping files in real time. Once your bookkeeper informs you that the file is available, all you need to do is to go over it. 

3. Mobile devices

Smartphones are not only designed to keep you entertained and occupied on a lazy Saturday morning as they can also be your perfect business companion. With your smartphone, you can chat with your bookkeeper to follow up on your financial report, conduct meetings with your employees using Skype, Google Hangouts and other similar apps. 

4. Project management software

It can be challenging to finish a job when you do not know what is going on with your team. Just because you are away does not mean the task will also be put on hold. Project management software allows you to get things done with your team even if you are away. These days, there are many project management tools that can help you keep track of employee activities and determine the project's progress. 

5. Bookkeeping software

Payroll management can be demanding as you need to make sure that information is accurate and correct. Bookkeeping software such as MYOB, Xero, Quickbooks Online and many others will enable you to take care of this task easily. It allows you to you spot irregularities that may lead to fraud. If there are any changes to the financial statement, it can be easily traced by merely checking the transaction history. 

Want An Organised Bookkeeping System? Start With Basics

Want An Organised Bookkeeping System? Start With Basics

Bookkeeping is important in every business, but business owners often lose interest in keeping the books. This task involves paperwork, which can be an additional burden to business owners who are already juggling multiple tasks. However, inspite of the difficult tasks involved in bookkeeping, it should not be ignored if you want to remain in business. If you do not know how to determine taxable income or monitor financial health, your business will take a turn for the worse. 

A well organised records will make it easier for you to prepare your financial statements, which contribute to the success of your business. Since financial statements are vital to monitoring the performance of your business, your cash should remain intact. It is only then that you will be able to grow your business. 

Financial statements provide you a summary of the results of your business operations. It is where most decisions from banks, investors and creditors depend on. Even if you are a small business owner, you should not underestimate the power of good bookkeeping and it all starts with the basics. 

Setting up a basic bookkeeping system

If you have chart of accounts, you will be able to have an idea about the basic financial reporting foundation necessary for your business. However, when designing your chart of accounts, you need to take a few things into consideration as the future growth of your business will depend on it. As much as possible, you should have a dynamic structure to be able to adapt to the changes taking place in your business. The chart of accounts will depend on the type of business you operate, extent of your inventory, extent of capital assets and many others. 

Cash vs. Accrual

The methods you choose will depend on your business needs. The decision on whether to use the accrual or cash method will be solely up to you. For small businesses, cash basis accounting is the most preferred method by small business owners because of its simplicity. This method records sales when payment is received . When you write the checks, you also record expenses. For bankers and investors who want to see results, the accrual basis of accounting is the way to go. This method recognises revenue when earned and not when collected. It also recognises expenses when it is incurred and not when paid. 

Manual vs electronic

If you want to reduce the time you spent on paperwork, electronic systems are a great option. Since manual systems demand accuracy, it also requires more time especially if you are not confident with using a computer. Electronic bookkeeping systems can involve using web-based system, bookkeeping software and spreadsheets. 

Business Automation: Bane or Boon?

Business Automation: Bane or Boon?

Business owners who have been comfortable with traditional bookkeeping may find automation quite intimidating. Automation is a big word for a business owner with a fixed traditional mindset. For them, it means embracing the most advanced technology and completely saying goodbye to manual processes. Automation, to those who have not tried it is a replacement to humans. This is not true. Automation does not necessarily replace humans. In fact, they make day-to-day tasks easier. 

With a traditional bookkeeping system, employees need to devote hours to get the job done because dealing with balance sheets, financial and other bookkeeping files should make no room for mistakes. Having a set of keen eyes ensure that mistakes are corrected before they can wreak havoc on your business. 

Any business owner trying on a new strategy will surely feel as though they are struggling with keeping pace with technology. If you are going to look at the bigger picture, you will be able to realise that automation is going to be beneficial to your business. Here are the stand-out benefits of embracing business automation:

1. It reduces manual tasks.

You need to spend grueling hours on payroll management because the data you should enter must be accurate. Sometimes, it may take days to finish one task and this is time-consuming. Just imagine the ordeal of dealing with tasks such as managing accounting, managing inventory and even sending invoice to customers. If these tasks are automated, you will be able to take care of other tasks and assign them to employees so no time is wasted. 

2. It ensures tasks are done in a timely manner. 

Collaboration is easier with automation as you do not have to keep on following up with your employees on the task you have delegated. If you have workers from other countries, you can easily monitor the task's progress. If the task you delegated is time-sensitive, you can simply put it on high priority status. Meetings can even be done using your smartphones or mobile device. 

3. It increases employee satisfaction and retention. 

Employees are important to every business. However, human errors caused employees to lose their drive and motivation. Automation sees to it that work is done to the highest quality by reducing errors. With the system's tracking tools, transparency is also promoted. As more and more employees are satisfied with the way the systems work, employee retention will increase and employee satisfaction rate will improve. 

How Do Business Owners and Bookkeepers Prepare For Digital Transformation?

How Do Business Owners and Bookkeepers Prepare For Digital Transformation?

The major transformation taking place in the accounting and bookkeeping industry has made it easy for business owners be it small, medium or enterprise to collaborate and streamline processes. Paperwork becomes less burdensome as everyone can gain access to information without worrying about location. It is, without a doubt, an era where workers are no longer chained to their desk. Now that accounting and bookkeeping system has become more advanced, business owners need to keep up by embracing digitalisation. Although the changes offered by modern technology bring convenience in the workplace, it cannot be denied that many people still shy away from these changes. 

Should business owners fear these changes? 

It might seem intimidating to dive into the pool of digitalisation if you have long been holding on to traditional bookkeeping system. Even when everyone is slowly moving to the cloud technology, you need to take gradual steps. As a business owner, you need to be aware how these changes are going to impact your day to day transactions. 

The most common misconception about digital transformation is that businesses are required to go 100% digital. Automation and technology are meant to assist you so you can streamline bookkeeping and accounting processes. This way, you can devote your time to other tasks that may require your attention. Going digital does not necessarily mean you are going to change the entire business process. You will simply eliminate time-consuming tasks and reduce human interaction to minimise errors. 

What is it like to automate bookkeeping processes?

If you have a pile of receipts sitting in your drawer for years, retrieving them can be a tedious job. A detailed record of your business transactions can be achieved when you automate bookkeeping processes. Aside from simplifying the process, you will no longer have to dedicate a large chunk of your time searching for receipts. You and your bookkeeper will be on the same page as cloud technology allows you to access information any time, any where and from any device. 

Bookkeepers need to consider a skill upgrade to keep up with modern technology. It is rapidly changing and everyone involved in the business must have the ability to cope with the changes. Bookkeepers should get familiar with cloud technology. Instead of being intimidated by it, bookkeepers must learn to embrace it because it provides absolute benefit especially when it comes to providing long-term benefits. 

Aside from accountants and bookkeepers, business owners must also see to it that employees are given substantial training. The only reason employees are reluctant to adapt changes is when they are not familiar with new technology. Everyone can go down the rabbit hole when they are in an unfamiliar territory. As they say, learning is a continuous process. Let this be an opportunity for you and your employees to grow with modern technology. 

Is It Possible For Accountants And Bookkeepers To Have Harmonious Working Relationship

Is It Possible For Accountants And Bookkeepers To Have Harmonious Working Relationship

Cloud technology paves the way for bookkeepers to change roles so they can keep up with the advancements of technology. While there are plenty of benefits that changing roles can provide, it can also create challenges when it comes to establishing working relationship with accountants. The roles that each party plays differ but problems take place as both accountants and bookkeepers do not know where to draw the line. When a good working relationship cannot be established, it is the client that suffers at the end of the day.

Common issues between accountants and bookkeepers:

• One or both parties can have disputes over territory because of the purpose of protecting their role. Disputes often create an unhealthy competition and both parties are unperturbed to the fact that the client is also affected.

• Bookkeepers have not fully understood what their limitations are and it can create a ripple effect on the quality of their work. There are instances when bookkeepers still accept jobs even though they do not have appropriate skills and experience and instead of accomplishing a satisfactory task, the result is the exact opposite.

• Bookkeeping can also be affected if the accountants do not make an effort to communicate with the bookkeeper. The same situation applies to a bookkeeper who does not inform the accountant about issues concerning the task. Aside from the confusion that it creates, there will also be plenty of room for mistakes.

While it is not impossible for accountants and bookkeepers to work together, a little effort is required to promote positive results.

• Bookkeepers and accountants should know where to establish clear boundaries. It is impossible to maintain a good working relationship if there is no clear agreement as to what role each should play. Looking after the client’s welfare is necessary and it also prevents disputes over territory.

• Both parties must understand the kind of task they are trying to work on. If one of them lacks the required skills and experience, it is impossible to complete an error-free task. If bookkeepers or accountants are not familiar with the task, it is necessary to seek advice.

• The lines of communication must always be open because if the concerns or issues come up, bookkeepers and accountants can discuss the proper resolution to the issue.

• When bookkeepers and accountants are working together, the first thing that they need to keep in mind is the client’s welfare. They have to act in the client’s best interests. They must work together to think about what will improve the client’s business. When both parties are cooperative, it is easy to achieve one common goal.

Without a doubt, a bookkeeper and an accountant play an important role for a business owner to succeed. One cannot perform without the other because bookkeepers and accountants are responsible for keeping the client’s finances in check. When there are problems with the finances, both parties can discuss what needs to be done. It is never impossible for bookkeepers and accountants to work in harmony if there is cooperation.

Important Bookkeeping Dates In Australia

Important Bookkeeping Dates In Australia

There are a myriad of responsibilities that you need to handle as a business owner such as taking note of the significant bookkeeping dates. If in the past you don't pay heed to these dates, you need to save these dates so you won't get into trouble when payment deadlines are approaching. </p>

When running your business, delayed payments are not an option. Even if you are busy with other business tasks, it is not an excuse to forget about important deadlines. Your bookkeeper should be well aware of these dates so timely payments can be made.  While they can be trivial at first, you will realize their importance in the long run. 

Superannuation

Superannuation refers to the funds, which are taken from the part of employees' wages. The employers need to do their part in ensuring that superannuation funds are paid regularly.  Usually, the employees prefer to put additional funds into the account.  As a business owner, you have two payment terms. You can either pay on a monthly or quarterly basis. The schedule of the payment is always 28 days after a particular period of time. 

Payment Summaries

The payment summaries refer to the detailed information of the employees' payments. It also provides details on the withheld taxes based on payments that the employer has made to non-employees.  It also includes payments that are made under a voluntary agreement and a labour hire arrangement. 

Pay as You Go Withholding 

Pay as You Go (PAYG) withholding refers to the summary of payments made to employees following a specified period of time. The information that can be found in the statement includes the amount of money your business withheld from the employees' payment. You are still required to present the statement even if your business has not withheld any payment.  The payment of PAYG withholding must be lodged 21 days after the end of the month. If the payment is made on a quarterly basis, the due is after the end of the quarter. 

Annual Withholding Declarations

One reason an employee is required to give his or her withholding declaration is when they want to claim an entitlement because it reduces the amount of money that will be withheld from their wages. The declarations also provide ample information to the employer in case the employee has relocated or made some important changes to his or her information. Annual Withholding Declarations are due on August 14th. After declaration has been received from the first declaration, the changes must be made to the employees' payments. 

Business Activity Statements

Any Australian businesses are required to secure business activity statements, which reflect all tax obligations. Payments for business activity statements must be made on a monthly basis, which is 21 days after the last day of the month. However, if payment is made on a quarterly basis, the due will be on the 28th day after the quarter. However, there is an exception to the rule. For the December quarter, payments are not due until February. 

You and your bookkeeper should know the significance of these dates because aside from saving you from shouldering the penalty for delayed payments, you will also help your business stay in the right direction. 

Handle Allowances Wisely

Handle Allowances Wisely

When it comes to managing your business, there is one important aspect you need to get straightened out: your finances. Aside from the salary that your employees receive, they are also entitled to receive allowances for work-related travels and other duties they need to fulfill. However, it is easy to commit mistakes when important details are missed. For instance, a bookkeeper can confuse reimbursements for allowances when these are two different things. In order to avoid misclassifications, you need to make sure that everything is classified correctly. It should start with familiarizing yourself with allowances and how they should be given to your employees. 

When are employees entitled for allowances?

The allowances are intended for giving employees extra spending money for work-related expenses. These are referred to as separately identified payments. 

• Employees receive allowances for traveling away from home in the course of their duties.

• The allowances will also be given due to working conditions.

• The employee has special duties.

• Expenses have been classified as an employee’s tax deduction.

It is easy to confuse allowances for reimbursements but they differ in more ways than one. The employee will receive allowances for covering anticipated expenses. Whether or not the employee has incurred these expenses, the allowances will still be given. Once given, the employee can claim a deduction for the expenses and this is also considered as an assessable income.

Reimbursements are given to employees to cover expenses that have already been incurred. The fringe benefits tax (FBT) will also be shouldered by the employer. Once the reimbursement has been found to be an assessable income, it will be covered by FBT. Claiming a deduction will not be allowed for this type of expenses.

Paying allowances: what are the super obligations?

• When employees spent money on tax deductible items, they will receive expense allowances.

• Expense allowances and reimbursements are not part of the employee’s wages or salary. Hence, they should not be considered as ordinary time earnings. However, they can still be included in ordinary time earnings.

• Once employees work during non-working hours, they are automatically excluded from ordinary time earnings.

When do employees receive travel allowance?

• Employees who travel receive allowance to cover expenses for accommodation, food and drink.

• Employees are entitled for travel allowance for the expenses they incur on work-related travels.

The rates for travel allowance

The expenses that are covered by travel allowances are meals, accommodation and deductible expenses incurred during travel. The rates are only applicable for commercial establishments such as hotels, motels and serviced apartments if it was a domestic travel. If the employee has opted for another accommodation, the rates will not apply.

The employee’s summary report must show the amount that has been expended and these are part of the gross earnings. When it comes to claims, the amount that the employee receives will be based on the deductible expense. When preparing summary reporting, following the Tax Office tables can prevent serious errors. You should also gain a better understanding on the difference between allowances and reimbursements, which usually bring confusions to employers. Allowances and reimbursements are not one and the same. You just need to understand how each of them works to prevent misclassification.

Get To Know The Software That Works For Your Business

Get To Know The Software That Works For Your Business

It is always a challenge for small businesses to keep up with the changes because they need to maintain a high level of productivity and efficiency. The race is going to be long and one of the roadblocks to maintaining efficiency is the delay in the bookkeeping process due to circumstances beyond an employer’s control. If these small businesses solely rely on their employees to delegate bookkeeping task, the time required to accomplish everything will make the company suffer. With the use of bookkeeping software, you are assured that the daily tasks are accomplished based on your expectations. There are plenty of options for you to choose from and it is always a battle between features and benefits. The following software can help you decide which software meets your bookkeeping needs.

Choosing the right software to ensure efficient bookkeeping:

1. Focus on your skills and needs when choosing the software for your business. The software you will come across is designed to help businesses in a specific niche. It will be useless to get one if they do not address these needs.

2. You will also have to dig deeper into the cloud applications. Ask yourself if they are going to help you improving the present bookkeeping process in your company.

3. Another factor to consider when choosing bookkeeping software is your budget. While it should not be your primary focus, you should also consider the type of software with benefits that outweigh the cost.

4. Be keen on the software’s add-on features because you might be paying extra for something you cannot use. See to it that they are going to be helpful in your transactions.

5. Start with a free trial so you will know if you have chosen the right software. You know you have chosen the right software if the business processes have significantly improved.

The following software can help you decide which software meets your bookkeeping needs:

• Xero

If you are always undergoing the same ordeal of gathering receipts and invoices for your financial report, Xero will save you from the hassle because it is capable of providing updated reports and they are presented clearly so you will no longer have to keep on guessing which is which.

For employees who wish to track their sales and purchases, Xero will make the process a lot easier. Bank transactions will be executed properly as the software also offers features that help you categorize transactions. You can get a regular update of reports and budgets without having to wait until the end of the month. For mobile devices, you can also gain complete access to the software by just downloading the app.

• MYOB

One of the many concerns of small businesses is keeping track of their cash flow. For starters, it is important to get a comprehensive report of the company’s financial activities. MYOB does just that. There is no need to worry about keeping your financial transactions in check because they are available right off the bat.

For tax obligations that need to be fulfilled instantaneously, MYOB will give you convenience of obtaining the necessary information. This software also has an app version so you can stay connected with your company’s bookkeeping activities anywhere you go.

• Reckon

If you want to survive bookkeeping nightmares, Reckon is the software you should consider because it has the ability to generate more than 200 reports. Even if you have a lot of things to attend to, you will not run the risk of losing track of your financial reports. If you need a copy of BAS and Payment summary, all of these can be obtained using the software. There is no need to spend too much sorting these summaries. It spares you from dealing with cumbersome bookkeeping structures and you can also be sure that quality is not sacrificed.

You can also monitor your bank transactions by simply linking your bank account to the software. This is very convenient because the process is done with the click of a button. The software lets you customize your invoices so you can include your logo and the payment terms of your choice.

Small businesses will no longer feel left out when it comes to providing excellent service to customers with the help of the software. Aside from these features, you should also choose the software that is capable of providing 24/7 customer support in the event you experience some system glitches.

Everything You Need To Know About Your Bookkeeper

Everything You Need To Know About Your Bookkeeper

Outsourcing a bookkeeper requires extensive research especially if you rely heavily on the Internet to look for some prospects. While setting some basic criteria can help you stay on the right track, it still pays to check other aspects for you to be sure that the person you have identified for the position can be trusted. Aside from checking the bookkeeper’s experience, it is necessary that you give importance to their credentials. A bookkeeper that is a registered BAS agent will give you peace of mind as compared to those who are not. Choosing a registered BAS agent is as equally important as other qualifications you are looking for in a bookkeeper. In fact, a registered BAS agent must be your top priority.

What is a BAS Agent

Preparing statements or financial reports for Fuel Tax Credits Goods and Services Tax, Luxury Car Tax, Fringe Benefits etc., are just some of the financial services that a BAS agent or Business Activity Statements Agent has to carry out. A registered BAS agent is also responsible for ensuring that the withholding obligations of the client’s employees are fulfilled. Withholding obligations include preparing the summary of payment. A BAS agent is also tasked to code all data and tax invoices into the client’s computer program. When it comes to providing advice about entitlements, liabilities and other obligations, it is also the job of the agent to keep the client informed of their responsibilities. For these responsibilities to be fulfilled, it is necessary that the agent is familiar with BAS provision. Filing with the Tax Practitioners Board is required for self-employed bookkeepers. It is also a serious offense to offer financial services even when the bookkeeper has not yet been registered.

What Does It Take To Be A Registered BAS Agent

You will need to comply with the core requirements so you can register as a BAS Agent. You have to be at least 18 years old to be considered an applicant for BAS Agent registration. A substantial experience in bookkeeping and other related financial services is also required. There are training requirements that you must also satisfy for you as part of the screening process. Your first option will be to obtain a Certificate IV in Financial Service and it should be awarded by a Registered Training Organisation. You will also be required to complete a course that is TPB approved. Regardless of your Financial Services course, GST/BAS taxation principles are already integrated into these courses.

The second option is earning a bachelor’s degree in Accounting or Certificate IV in Bookkeeping. All of which can be obtained from a Registered Training Organisation. Aside from the educational requirements, you will also have to demonstrate that you have relevant work experience. You should also have an involvement in at least one BAS service based on Tax Agent Services Act. Be sure to complete 1400 hours relevant experience for at least 3 years or 1000 hours relevant experience if you are considered a voting member of a recognized tax agent association or BAS Agent association.

You must also secure your credentials or proof of qualifications. These should include academic transcripts, details of referees and proof of membership for any recognized tax agent association or BAS. Once completed, you are eligible for applying for BAS registration.

Why Choose A Registered BAS Agent

The quality of work is guaranteed.

Since not all bookkeepers can pass themselves off as a registered BAS Agent, choosing a registered bookkeeper guarantees that the job is going to be done based on your set of expectations. They also face penalties in case they committed a serious offense.

The accounting operations become smooth and uninterrupted.

Entrusting accounting jobs to a qualified bookkeeper will ensure uninterrupted transactions and operations because you know for a fact that the bookkeeper already knows how to go about carrying out the task. Problems are communicated and solved properly. Financial reports are also prepared based on the required time frame.

You save yourself from serious trouble.

If you intend to hire an unregistered bookkeeping, it is just similar to supporting a crime. It is because you have allowed someone to work for you even when they have not complied with the requirements. Illegal bookkeeping is considered a civil crime as every bookkeeper must abide by the registration rule before they can offer their services. It takes years before you can taste the sweet success of running your business. However, if you risk hiring an unregistered bookkeeper, all of your hard work and effort will disappear at the drop of a hat. Are you willing to risk it all and accept this costly mistake? If you want to encourage business growth, you should never put your company at great risk and only choose a registered BAS agent.<

Essential Information You Need To Understand In A Profit & Loss Report

Essential Information You Need To Understand In A Profit & Loss Report

It is such a whiff of fresh air if a business owner sees a Profit & Loss Report that demonstrates positive figures because it only indicates that the business is heading in a favourable direction. However, little do business owners know that it takes more than just going over the reports to thoroughly understand its significance to the business. There are business owners who content themselves leaving everything to the bookkeeper including generating Profit & Loss Report. Although bookkeepers are known for getting the reports ready, this does not necessarily mean that business owners should not take a look at the reports.

When running a business, regular monitoring of business performance is important. It keeps you updated of the decisions you need to make and you can also effectively identify the factors that contribute to the success of your business. As much as possible, a Profit &amp; Loss Report must be run over a specified period of time. There is a heap of information you can get from the report such as the income that your business has received and the money lost. A bookkeeper explains the figures in the simplest possible terms. This is why you need to gain basic understanding on interpreting these reports.

Income

The total invoices or sales invoiced over a selected period are referred to as Income. The Income is GST Exclusive and is accrual based. It can be found right at the bottom of the report. The Income is also known as turnover. The income is also the total dollar figure of invoices based on the invoice date regardless of the date you received the payment.

Cost of Goods Sold or Purchases

It shows the expenses you have incurred that have directly contributed to your income. Your purchases are considered inventory items and the cost of goods sold are the items for sale.

Gross Profit

When the income is subtracted from the Cost of Goods Sold, it will give you the Gross Profit. You will be able to understand the markup percentages by simply referring to the gross profit. This is also expressed as a percentage of income. It is possible for your gross profit to be equal to your income if your business has no cost of goods sold.

Expenses

Aside from cost of goods sold, the expenses section also shows other expenses that your business has incurred. It is important that these expenses are categorised correctly. Some of the expenses that are found under this section include administration expenses, operating expenses and payroll expenses.

Net Profit or Net Loss

Net profit is the result of the total of income, less cost of goods sold less expenses. Your business makes a profit if the figure is positive. However, the business has made a loss if the figure is negative.

If you want to know about the amount of money available in your bank account, a Profit &amp; Loss Report can provide you the information you need. It is also possible for the profit to be high and the cash flow to be low. Even if you have a healthy cashflow, it does not necessarily follow that you have a healthy profit.

Committing A Deadly Sin Called Multitasking

Committing  A Deadly Sin Called Multitasking

We all have two hands and one brain, but why is it that we are more inclined into juggling several tasks at the same time? We rivet to the computer screen while grabbing a sip from a tepid cup of coffee, one hand is on the keyboard while the other is on the phone. Multitasking is a habit that everyone is stuck in. Being slave to multitasking does not make the entire work process easier either. In fact, it does more harm than good.  With multitasking, you give only a percentage of your attention on various tasks. For instance, you work at the computer, but you are also calling a friend on the phone. Instead of giving your full attention to one task, you only give 50% of your attention to each task. Does this mean you are compromising on quality? 

Why multitasking doesn't work?

You might have already deluded yourself into believing that doing multiple jobs at the same time can speed things up. Wrong. The more tasks you try to carry out at once, the more time  wasted. That's the theme of the equation because you are not giving your full attention to these tasks. The chance of committing errors also increases because you have to look away from your screen to attend to another task. 

If you deem multitasking as a technique to increase productivity, you might be on the wrong track. This may appear to be a startling truth but doing two jobs at once can make you miss out on doing the job correctly. If you commit errors, you have to go back and repeat what you did. You keep on moving backward instead of moving on with another task. 

You can also hamper the learning process if you settle with multitasking. It appears that you  race against time and instead of carefully learning the process that your task entails, you are focused on one goal, which is finishing the job at once. 

Since mistakes are inevitable when you are multitasking, you are more likely to cheat by ignoring the mistakes you made so you can move on with another task.  Instead of multitasking, introducing mindfulness into your life can work wonders. Not only does it help you stay focused, you can also improve your personal life. 

When you practice mindfulness, your attention becomes undivided and you have fuller concentration on things that really matter. Mindfulness also allows you to dedicate your time on your work so you can deliver high quality results. You are not focused on finishing the job but also on ensuring that the job is completed correctly. 

You can take your job to a higher level if you choose to be mindful. It takes time before you can master mindfulness, but once you do, you know it will be worth it. Even on a busy day, you will feel in total control of the situation when you practice mindfulness. You are not caught trying to complete a plethora of tasks because you are fulfilling your job responsibilities one at a time. No time is wasted and you are sure that you are not letting quality take a backseat. 

Bookkeeping Techniques For Small Business Owners

Bookkeeping Techniques For Small Business Owners

Bookkeeping is probably one of the most dreaded tasks for small business owners. Aside from entering data and keeping accurate records, the process of recording all financial activities requires a great deal of work. Small business owners who have not anticipated the negative effects of ignoring bookkeeping will sure consider this task unnecessary so long as the business is going well. Unfortunately, bookkeeping is not easy as everyone might think. It requires accuracy and as a business owner, you should take full responsibility for your business’ financial activities. It might be challenging especially if you don’t have a background in accounting. This is why taking a short day course on bookkeeping or accounting can ease your way into the whole process.

While it is undeniable that bookkeeping is hard as it demands accuracy, there is a big difference when you know the bookkeeping basics. It prevents you from committing costly mistakes which can be difficult to undo. There can be some issues with bookkeeping, which you may find difficult to address because you don’t have basic knowledge of the system. Before you consider putting up a business, make sure you include bookkeeping in your homework.

1. Make an effort to take a short bookkeeping course

Just because you don’t have predilection for math doesn’t mean you should hate anything related to it. Being a business owner requires you to know everything your business encompasses and bookkeeping is no exception. In fact, it is part and parcel of every business. You will be amazed how much you will learn from a short day course and it will be all worth your efforts.

;2. Utilize bookkeeping software

<p>There are different tasks involved in bookkeeping and it requires a good balancing act. Balancing your bank statements by hand is such a painful and tedious job. You can spend the whole afternoon doing it and go back to square one upon discovering some erroneous entries. With the use of bookkeeping software, you can make the process a lot easier especially if you opt for software that gives you the ability to monitor your bank transactions.;

3. Keep accurate records

Good bookkeeping means ensuring your keep your records accurate at all times. Develop good working habits and keep track of company workflow. Receipts must be kept in one folder and filed on a basis. For future reference, store them in one place so you won’t have a hard time retrieving them.

4. Hire a licensed bookkeeper.

A bookkeeper provides a systematic process so you can handle all of your finances with ease. When hiring a bookkeeper, make sure you check their qualifications. Choose someone that goes beyond giving you basic understanding of the system. A bookkeeper who thinks outside of the box is the way to go. This way, you will be able to follow a workable system that makes the process more efficient.

Recording your financial activity can be quite an overwhelming task but following some best practices can save you from getting stuck in a chaotic business maze. Whenever you feel like taking bookkeeping for granted, think of its long term benefits to your business, so you can regain your focus and run your business like a pro.

Is It Time To Change Your Bookkeeper?

Is It Time To Change Your Bookkeeper?

Are you considering changing your bookkeeper as you have noticed a dramatic change in his daily performance? You might be vacillating on whether to keep the same bookkeeper or hire a new one as you might just be overreacting or being unfair to your bookkeeper. It is indeed difficult to decide when you have been keeping the same bookkeeper for years. Unfortunately, if your business is already suffering due to the bookkeeper's incompetency, it is about time you look for someone that fulfills the job role. 

You may also want to take a look at these warning signs that can help you decide if your current bookkeeper deserves a second chance: 

1. Your financial reports and other essential forms are not delivered to you on time. 

In theory, business owners should have instant access to financial reports to find out how the business operations are doing. Although preparing financial reports may require a certain amount of time, the reports must be ready when you need them. If there was a delay in submission, ask yourself if you have something to do with it. Are the materials available to the bookkeeper? If you have provided ample time and sufficient materials for the reports to be complete, you may have to think about changing your bookkeeper especially if the bookkeeper never makes any timely submission. 

2. Your bookkeeper never stays in the office.

Is your bookkeeper always busy or out with other clients. Are your bookkeeping tasks not being attended to even when you are closed to the deadline? Do you have to constantly remind your bookkeeper to take care of your financial report before any attention can be given? If you are not getting your bookkeeping tasks done when they are supposed to, the task may no longer be appealing to your bookkeeper. 

3. Your bookkeeper never considers discussing your financial reports. 

It is your bookkeeper's responsibility to explain the details of your financial reports so you will know if the information is correct. As a business owner, a full access to the information is essential. If your bookkeeper does not take time to schedule an appointment with you so you can go over the details, this is considered a warning sign. You need to know if the information is consistent because if ATO finds out about any erroneous information on the report, you can get penalized for it. 

4. You receive a lot of notices from ATO in the mail.

It is already an obvious warning sign that your business is not being taken care of correctly if you receive repeated notices from ATO. These notices should be taken seriously because if your business has been red-flagged by ATO, you may have problems filing your forms in the future. If this happens frequently, talk to your bookkeeper so you will know where the problem lies. If you are not satisfied with the answers or if the bookkeeper beats around the bush, it is time you opt for a new bookkeeper. 

5. You don't receive timely phone calls from your bookkeeper. 

One of the reasons a business owner hires a bookkeeper is get assistance so the daily tasks become less burdensome. These objectives are not achieved if your bookkeeper does not return your calls in a timely fashion. Something is obviously wrong if this happens frequently. A few incidents here and there are acceptable but if it becomes habitual, it should be something to worry about. 

5 Signs Of Fraudulent Payroll Activity

5 Signs Of Fraudulent Payroll Activity

Almost all businesses are vulnerable to payroll fraud and it involves a serious alteration of payroll system. There are a number of ways fraud can be committed and the most common is boosting the amount of salary that the employee is supposed to receive. This is already a cause for alarm especially for small businesses because when left unchecked, companies can lose a large chunk of money. It can also be an end to a fledgeling business. Some employees may be claiming to have worked on a specific shift even when these are not true. If you remain unperturbed, your business can dive into a cesspool of bankruptcy and it's already too late before you know it.

5 Red Flags Of Payroll Fraud

1. Payroll checks are inconsistent.

You won't be able to find out that there is something fishy going on with your payroll system unless you are keen on details. You might be presented with a payroll with all the information in place, but you need to look closely as you might be missing out on determining the red flags. Are there deductions or taxes being withheld? When there are inconsistencies in your payroll system, it means that there is something unusual going on, which you need to pay serious attention to.

2. Unsecured files.

When someone is given complete access to payroll system even when they are not authorised to do so, is already a good sign that someone is trying to manipulate the payroll records. Only the individuals who are responsible for paying employees should be given complete access to these confidential files. They should not be shared wants anyone who wants to take a "sneak peek" of such records.

3. Duplicate data of existing and ghost employees.

Make it a habit to check your master file to reduce the risk of ghost employees. If you see duplicate information such as the name of employees, bank account and other personal information, conduct further investigation for you to find out if there is an ongoing fraudulent activity in your company.

4. Access to payroll outside business hours.

While out of hours access to payroll cannot be avoided especially when you are trying to meet deadlines in submitting reports, it is necessary that these after hours activity are audited. Otherwise, the access will become questionable.

5. Shared logins.

Logins for systems that contain confidential files must not be shared because it is understood that these are not intended for public access. If your log in information has been changed, you need to surrender your old logins to the payroll staff for deletion.

One person should not be left in charge of the entire payroll system. Have someone to check the records on a monthly or quarterly basis so you can track any fraudulent activity. When a payroll staff intends to add or remove names, it should be done with an approval from the manager or someone from the payroll department.

Payroll must also be kept up to date and hiring a third party payroll staff that can keenly check the details of the record can also nip payroll fraud in the bud. The process of prevention may require immediate attention but it will pay off in the end knowing that your company has been spared from more serious problems.

Bookkeeping Mistakes That Automation Can Address

Every action that a small business owner takes can have a negative or positive impact on the business.

While the financial health of your business may not be the only aspect you need to keep a watchful eye on, most business owners owe their success to proper management of cash. Without a doubt, many small businesses watch their company crumble down because of poor financial health. This is because budgets and resources are not handled properly. Automation takes away the burden of manual tasks. It shortens the time required to finish a bookkeeping task and lessens human interaction so fraud can be minimised if not completely avoided. There are also some bookkeeping mistakes that automation can magically addressed.

1. Do-it-yourself bookkeeping

Yes, DIY bookkeeping can do more harm than good. Initially, small business owners consider the idea of not hiring a bookkeeper beneficial because they have spared themselves from incurring higher costs, but in the long run, a business owner will realise that not having a bookkeeper can snowball into more serious problems especially when it comes to filing tax returns. Aside from the increased chances of committing mistakes, it may take hours or even days before you can correct the mess on your financial report. Automation solutions will ensure that you effectively track your expenses and update your books.

2. Not reconciling accounts

The effects of not reconciling accounts are often underestimated, but it is considered to be a critical step in every bookkeeping process. It helps you to determine if there are discrepancies on your accounts and it easily addresses bookkeeping or accounting mistakes. To some, account reconciliation is deemed as a less important task that can be completed later. Automation will ensure that business books are reconciled with bank and card accounts regularly.

3. Not recording expenses

Every financial transaction taking place in your business is important. It allows you to track how you are spending or generating money. Even small expenses should be regularly recorded because once they accumulate, they can balloon to bigger expenses. Ever wondered why you do not have enough cash for growing your business? Not tracking your expenses diligently might be the culprit. Automation resolves issues with your expenses as it ensures all expenses are monitored. This way, you will know whether or not you have enough money to cover expenses or to expand your business.

4. Not maintaining cash for minor expenses

You can easily lose track of the money you spend from your petty cash reserve if you do not manage it wisely. Even if they are just minor expenses, tracking the funds you have withdrawn will help you determine how much you are spending. Automated bookkeeping updates records of withdrawn funds and balances the remaining petty cash reserves.



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