Day to Day Bookkeeping Setup and Process

Friday, 11 Feb 2022

Bookkeeping is one of the most significant parts of running a business in Melbourne as it helps manage the finances effectively. It helps record every transaction taking place in the organisation and categorise them as debits and credits.

The summary of these transactions forms the financial reports that aid the business owner in understanding the business’s cash flow and financial health. Thus, they hire experienced Bookkeeper Melbourne to set up the recordkeeping system and manage the process efficiently.    

Accrual accounting is the usual method of recordkeeping for small businesses because it immediately records the transaction. Most entrepreneurs now have customised accounting systems that have helped reduce time-consuming data entry tasks. Here is what the bookkeepers need to do daily to make sure the books are updated and accurate.

1. Manage the Accounts Every Day

Bookkeeping involves classifying every expense and income in the books, ranging from paper bills and cost of a team lunch to equipment purchase and paying for utilities and lease in Melbourne. The incomings and outgoings must be accurately recorded in the books to avoid missing out on any transactions.

It is highly significant to do this task every day so that the accounts are refreshed and updated and have the latest financial report ready for the business owner and the stakeholders. The accounting software allows the user to access real-time data and financial reports to invest and spend carefully.

It helps the management understand the Melbourne-based business’s cash flow, its reserve capital, and working capital. They can make informed financial decisions based on this information.      

2. Reconcile Bank Accounts

Reconciling is essential to ascertain that the actual incomings and outgoings match with the cash coming into and leaving the business bank account at the end of the week or month.

It is necessary to ensure that the books are accurate and that there are no missing transactions, which validates the recordkeeping process. Reconciling helps identify frauds and embezzlements by employees in Melbourne. 

It is possible to make mistakes while recording the transactions. Thus, the bank statements help tally the numbers and the balance amount in the account. It helps in submitting error-free financial reports and filing correct income tax returns during the tax season.      

3. Inventory Management

Goods ready to be sold by the business are known as inventory. The bookkeeper needs to check the quantity of the goods, delivery of items, and demand for goods as per the sales forecast. The benefit of using a professional is that they make sure that the stock is available for the sale period and there is no shortage. 

They check for damaged and perishable goods and remove them from the final list so that the business owner understands the actual amount of available stock, ordered goods and payments made to the suppliers. They need to review the stock regularly so that the business does not fall short of stock during peak sales.   

4. Invoicing

Business owners in Melbourne have adopted computerised invoicing that help in sending estimates to customers and getting their approval for the same. The invoicing software tracks the hours and bills the customers accordingly. It also adds the unbilled expenses, such as travel costs, to the final invoice.

Bookkeepers keep track of the invoices generated by the system and follow up with the clients for payments by sending them reminders. They ensure that the invoices are not delayed and that cordial relations are maintained with the customers.    

5. Payroll Management

Employers must pay salaries and wages to the employees and thus need to manage the payroll and taxes. To help small business owners in Melbourne manage the tax and the reporting for payroll, the Australian Government recently introduced Single Touch Payroll.

The bookkeeper takes up the reporting task to provide all the required information to the ATO. It includes informing the office about the salaries and wages, deductions, allowances, superannuation, PAYG withholding, etc. They also ensure that the report follows the state regulations and the taxes are calculated accurately.        

6. Bill Payment

Businesses in Melbourne need to pay their suppliers and vendors regularly. Other expenses incurred by the entity include a lease, utilities, and other bills. The bills need to be organised in chronological order and need to be paid on time to avoid defaults and penalties.

Some of the bills are generated at regular intervals, and others are one-time payments. The bookkeeper must keep track of the payment deadlines and make sure that they are not missed. Some of the suppliers offer a discount for early payments, and it can be utilised by the business owner to save money.    

7. Data Backup

While most of the businesses in Melbourne use cloud-based accounting software to secure their data, some of the entities still follow the manual backup approach. Financial information is highly significant for the business and must always be protected.

Thus, the bookkeeper needs to have a backup plan in place in case of data loss due to negligence or manual error or malware. The automated systems must have a cybersecurity system in place to reduce the risk of hacking and data breaches from competitors or fraudulent employees.

Conclusion

Initiating the process of bookkeeping in Melbourne becomes simple if the professional and the business follow the daily tasks without fail. Advancement in technology has automated most of these processes and have made compliance effortless.       

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