Wednesday, 13 Mar 2024
New businesses trying to make their mark in a highly competitive marketplace are saddled with the burden to grow quickly. Entrepreneurs must be on their toes to establish their brands in the cluttered space and break even. Brand building, supply chain, stock management, recruitment and business development leave little to no time to focus on financial management. It affects the cash flow and can lead to misuse of funds that can impact the financial health of the entity.
Thus, bookkeeping must begin at the inception of the business and be handled professionally by a qualified Melbourne bookkeeper who understands the industry and its challenges. So, here is the ultimate bookkeeping checklist that can help new businesses. It is required to keep track of expenses while making every effort to increase income.
Bookkeepers have to perform certain tasks every day without fail. These include:
Expenses can exceed the expected limit for various reasons, such as machinery breakdowns that need to be replaced immediately for smooth operations. Thus, bookkeepers need to check the cash reserves every day to determine the available capital.
Identifying the incomings and outgoings helps to understand the cash flow so that funds can be allocated appropriately. It ensures that accounts are up-to-date and accurate and the management is aware of the inflow and outflow of capital.
Recordkeeping is an ongoing activity that takes place daily in the organisation. It helps to categorise income and expenses as credit and debit and put them in separate accounts that can be viewed as assets, liabilities, expenses, and owner’s equity.
Weekly bookkeeping activities are a bit different than daily tasks. They are listed below:
Invoicing is one of the significant bookkeeping tasks that must be done weekly to send out invoices on time and avoid mistakes. It ensures the payments are received quickly and there is no deficit in the cash reserves.
Business owners have to pay several bills before the due date to avoid penalties. Thus, bookkeepers must schedule payments for all the bills including utilities, commercial leases and supplier bills.
With several daily transactions, it is possible to miss out on making some entries or duplicate entries. These problems can be rectified through the reconciliation of bank accounts.
Bookkeepers in Melbourne must ensure that they maintain a positive cash flow, which entails cutting down on needless expenses. For example, if the business has incurred an unexpected expense, the business trip planned in the week can be postponed or rescheduled online to save costs.
Bookkeepers keep all receipts safely to maintain business records. As per the ATO, financial records and receipts must be preserved for up to five years.
The completion of the month is the time to consolidate the information and revise the systems.
The accounting software used by the business must be updated every month to improve data security and keep the information protected from fraud and hackers. It is also helpful in storing data effectively and taking backups.
Inventory management is an integral part of bookkeeping in Melbourne. It ensures that the optimum amount of stock is available with the business to avoid spoilage in storage or lack of units during high demand. It helps track every unit ordered and stored and the need for more procurement per the demand.
Bookkeepers are responsible for receiving client payments at the end of the month if they are still pending and following up on unsettled payments.
Salaries are to be paid to the employees at the end of the month. Thus, bookkeepers must calculate the payroll expenses after withholding deductions and filing taxes. The payments must be deposited in employee accounts and the payslips and records must be created accordingly.
The completion of a quarter is the time when bookkeepers have to make financial reviews and assessments, such as:
The profit and loss statement helps to understand the performance of the business in the past three months. It offers an insight into the profitability of the entity and helps identify weaknesses.
The cash flow statement analysis helps determine if the cash flow is positive or negative. If it is positive, the same strategies can continue. However, the processes need to be tweaked for a negative cash flow.
The end of the financial year is the time to retrospect and make improvements to the existing systems for better revenue generation. Other tasks include:
At the end of the year, the business owner must identify and clear all the unpaid debts. It will prevent them from getting carried over to the next year.
All financial reports must be prepared and examined to identify the business’s progress. This helps to check whether the entity has accomplished its goals and compare its performance with previous years.
Tax returns are to be paid by 28 February by companies if they are doing it on their own. If they have a registered tax agent, the date will change. Businesses must pay income tax, CGT and GST annually, quarterly or monthly. Bookkeepers in Melbourne calculate the correct amount and claim deductions to reduce the cost.
New businesses are in the nascent stage and must manage their finances carefully to survive the competition. They must hire a professional to handle the daily, weekly, monthly and annual bookkeeping tasks. The checklist given above can help entrepreneurs track these activities effectively.
