Friday, 24 Feb 2023
Business owners have a lot on their plates, and managing business capital is just one of their responsibilities. The workload involves supervision of projects, networking, pitching to important clients, liaising with potential suppliers, financial management, employee management and much more.
With so much work to do, they do not have the time to stay on top of the accounting books. Thus, they hire expert bookkeepers Melbourne to do the job efficiently. Bookkeeping is imperative to record all business transactions correctly and maintain the books.
A single mistake or missed entry can lead to losses and impact taxes. So, here are the top seven bookkeeping secrets that can get the business books in shape before the tax season. It will ensure that you do not feel stuck at the last minute and have all the records organised accurately for audits, reports and inferring insightful information
Recordkeeping is the basic function of bookkeeping, and it helps keep a trail of all the incomings and outgoings. Business transactions occur through various methods, from cash payments to online money transfers and cheques.
It can be challenging to record them in books whenever money is exchanged with a third party. However, it is imperative to keep the books updated and error-free. Also, these must be chronologically organised to check historical data and find information effortlessly while filing business taxes in Melbourne.
They must be categorised perfectly under accounts payable and receivables. Entrepreneurs can use the recordkeeping evaluation tool to review books.
Paying bills on time is essential to maintain a trustworthy image among suppliers and vendors. It helps build a solid credit profile to get credit and funding easily whenever needed. Also, late payments incur penalties or fees that can add to the expenses and become a huge amount at the end of the financial year.
Thus, set reminders in your phone for lease and utility payments, mark the lodgement dates for income tax and PAYG on the calendar and ask your bookkeeper to remind you about payroll, bills, and report submissions.
Whether you have an in-house bookkeeper or outsource the task to a renowned bookkeeping company in Melbourne, they will use cloud-based accounting software. It is the need of the hour because it has taken away the stress from bookkeeping through the automation of repetitive activities.
The time-consuming tasks become a breeze with the help of a professional using this advanced tool. It can be customised to suit the needs of the business and makes reporting, recordkeeping, bank reconciliation, payroll and inventory management a cakewalk.
Bank reconciliation is necessary to identify errors and anomalies in recording transactions. It must be done monthly or quarterly, depending on the volume of incomings and outgoings. It helps identify outstanding payments because the cheques are still in transit, so there are no surprises when you look at the reports.
Looking at the bank statements every month helps to determine payments you need to curtail, such as credit card fees for a card you wish to discontinue. It provides a peek into the financial health of the business in Melbourne and aids in preventing fraud.
Bookkeeping can become a joint effort instead of a one-person army. Entrepreneurs must make employees from all departments financially literate to make them spend wisely and avoid financial blunders that can cost the business dearly.
They must be provided with budget, expenditure and financial updates for their departments to help them utilise the resources effectively. They must be asked to check the receipts and invoices for errors that are relevant to their projects, and they should inform the accounting department about payment deadlines and follow-ups with clients.
Keeping all the documents protected to have a backup in case of a glitch is mandatory. The financial statements must be retained for five years from the date the bookkeeper recorded the transaction. In addition, you must store tax returns and reports to be presented to the ATO whenever asked.
They can be maintained in physical or digital forms, but electronic records are always preferred. Thus, Melbourne businesses should use the cloud to store data and make it secure with ample cyber security provisions.
Rechecking the books ensures that all the records are flawless, and it must be done at the end of the financial year as well. Maintenance of the books is a daily activity that cannot be missed, and this is why bookkeepers are hired to keep the records current and correct.
Consistency is the key when it comes to bookkeeping. Also, technological advancements and software have made it easier than ever to keep books maintained. Reviewing should be a constant practice to keep accounting mistakes like duplication and omission at bay.
Businesses must have infallible books that prevent losses and improve financial management. Entrepreneurs in Melbourne must hire specialised bookkeepers to streamline the process and keep good records. They should follow the bookkeeping secrets to get organised.
