Top 15 Bookkeeping Tips From the Pros

Thursday, 23 Sep 2021

The success of a business is dependent on the efficient management of its finances, and the person who is responsible for this job is the bookkeeper. These professionals have the knowledge and the expertise to maintain updated records and prepare accurate financial statements. They make sure that the business stays stable and scalable with the help of their insightful advice, deductions, measures, and assessments.

They have a lot on their plate and work relentlessly to keep the company on the path to success. If you have a small business that is beginning to grow, you must hire a qualified bookkeeper in Melbourne to develop it further. Here are a few tips from experts that can help you keep your bookkeeping game on top.

1. Analysing Business Performance

While tracking business transactions is a part of the bookkeeper’s job profile, they must also assess the performance of the venture. It involves comparing the actual spending with the forecasted budget for the quarter or the total sales to the projections. This way, bookkeepers can examine the progress of the company and evaluate its ability to accomplish its long-term goals.

If the Melbourne-based business is not able to match its planned revenue forecasts, the bookkeeper can suggest ways to make it happen. It allows the entrepreneur to have a clear idea of the performance of the projects that are generating a good return on investment.

2. Using Advanced Technology

Bookkeeping has come a long way from merely being restricted to manual data entry that took hours and hours. The use of accounting software has reduced not only the time spent on these arduous chores but also improved efficiency and accuracy.

The cloud-based software available in Melbourne these days allow the bookkeeper to automate all the processes, ranging from report generation to invoicing and payroll processing. Thus, utilising technology should be a priority to enhance productivity.

3. Having Access to Data

It is highly recommended that the entrepreneur, stakeholders, and the bookkeeper should have real-time access to the financial data. It helps them to ascertain the health of the business at any given point, identify frauds, read the updated records, look at the latest reports, and look into the historical data.

They can check it on their smartphone or the computer without any hassle with their authorised password on the accounting system.

4. Managing Cash Flow

The foremost responsibility of the bookkeeper is to manage the cash flow by invoicing at the right time and paying all the bills to avoid penalties and late fees. The professional has to keep track of the incomings and follow up with the clients in Melbourne to get the payments as soon as possible.

They can use their relationships management tactics to pay the suppliers on the precise due date so that the cash stays in business for a longer time.

5. Executing Cost-Cutting Measures

The most sensible advice of bookkeepers comes in the form of asking for the reduction of redundant expenses. It allows the business owner to reduce the cost of operations, which in turn helps in reducing the price of the products on offer.

Thus, the business can attract more buyers and increase sales while keeping the expenses curtailed. Thus, cost-cutting should be a significant part of the bookkeeping process.

6. Recording All Cash Payments    

Small cash payments can sometimes be taken by the entrepreneur for spending without putting them into the business account. It can lead to errors in the reports and books. A bookkeeper ensures that every transaction, no matter how small, is added to the books accurately. If you delay the entry, it can make you forget the exact amount or from where the money came.

7. Payroll Tax Planning

A professional can help the business to categorise all the employees into various job classifications, such as contract employees, full-time employees, and part-time employees. Also, they ensure that their salaries and wages are paid as per the state regulations and the tax reporting is done accordingly.

8. Creating A Budget   

Budgeting is a part of business planning that is needed to ensure that the business in Melbourne is performing as per the roadmap. It involves forecasting the expenses, sales and profits for a given period. The projections work as a benchmark and the bookkeeper compares them with the actual numbers accomplished to analyse the progress of the business.

9. Correct Organisation of Records

The most significant objective of bookkeeping is to stay on top of the books all through the year without fail. It implies that all the entries should be done in chronological order and must be organised in the correct categories.

10. Accurate Sales Invoicing  

Any inaccuracy or delay in invoicing can lead to cash flow issues and errors in the books. Efficient bookkeeping keeps a tab on the invoicing and takes care of sending out the invoices as soon as the project is completed, or the goods are delivered to the clients.

It helps in getting the payments as quickly as possible and the bookkeepers keep following up with the customers to get the cash in the organisation.

11. Separating Personal Finances   

The golden rule of bookkeeping is to keep your personal finances separate from the business capital. Thus, the entrepreneurs in Melbourne must open a business account for their companies when they are established to avoid any confusion.

Otherwise, it can become extremely challenging to identify the business income and expenses when the owner is using his personal account for the transactions.

12. Claiming Tax Deductions

Expert bookkeepers inform the entrepreneur about the tax deductions that can be claimed by the business for some expenses. Thus, the company will be focusing only on those expenditures that can be claimed during the tax season to save taxes from eating into the profits of the organisation in Melbourne.

13. Finding the Right Bookkeeper

Many small business owners in Melbourne think that they can save money by doing the books themselves or asking an employee to help out. However, a professional can help them save much more than they anticipate through tax savings, cost-cutting, financial advice, and reduction of debts. Thus, hiring a professional and experienced candidate for the job is mandatory.

14. Identifying Inaccuracies

Reconciling bank accounts in Melbourne is the most prominent task of bookkeepers who do it weekly or monthly to ascertain the accuracy of the records. It helps in identifying any errors in the books or missed entries by matching them with the bank statements. It also aids in detecting frauds and embezzlement from employees.

15. Managing Inventory

Keeping track of the stock is essential for small businesses in Melbourne as they do not have a specialised person for the job. Many bookkeepers take up the responsibility to make sure that there is an optimum level of stock available at any given time.

They help in paying the suppliers on time and tracking the supply chain management. They check the stock for missing or damaged items and even theft so that the business does not have to suffer losses.

Conclusion

All the tips mentioned above imply that hiring a bookkeeper in Melbourne is vital to manage a variety of functions for a small business. It not only helps with financial management but also with productivity and performance enhancement.    

 

 

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