FIVE BOOKKEEPING TIPS FOR SMALL BUSINESS
We can’t all be ideal bookkeepers. Does the idea of finances and numbers scare you or make you want to run away? Don’t. These easy tips will have you in financial good habits before you know it.
Are you keeping it all in your head?
It’s a syndrome that plagues many small business. Keeping it all in your head can, of course, be a fairly effective method- you know who you need to pay, why and when, and who owes you. And all without the need to run backups, learn software or spend time tied to your desk. However, it’s also a way to set yourself up for failure. Goals will be missed, paperwork or deadlines forgotten- or worse, unpaid bills- and eventually it will all come crashing down. Getting a good handle on your cash flow will solve these persistent issue, help prevent ups and dives of cash flow and boost profits.
What bookkeeping tips do you have, then?
Firstly, it’s critical that you make adequate plans for big expenses. Spend some time considering what might occur within the next five years, be these facility updates, big office purchases or more. Almost every business has fluctuating periods of gain and loss, and a major expense hitting in a low time can be catastrophic. A little forward planning, however, will make certain that the funding is there when you need it and hasn’t been frittered away or withdrawn previously.
What is most critical?
A big part of good bookkeeping in Melbourne is tracking your expenses properly. Tax write offs, in particular, are often missed. While you can use a business credit card to help keep a lot of expenditure in one place and recorded, you should also have other systems in place to make sure you are prepared for tax returns and audits when they come. Make notes of meetings and events, especially if you’re claiming travel for them. Car mileage should be logged correctly in a log book. Relevant slips need to be kept and filed. That way, you’ll never be caught short. It’s equally important for you or your bookkeeper to record your deposits correctly. Whether it’s a loan or a payment from a client, you need to be able to explain exactly where it came from- what’s called an audit trail. You don’t want to be taxed on something you paid over yourself now, do you?
What else matters?
Talking about taxes and audits, a big part of getting bookkeeping in Melbourne right is going to be setting aside the right money for your taxes. You know the dates in advance, after all- don’t be irresponsible. Unpaid taxes get penalised heavily as well as accumulate interest. Make sure the money you need is there when you need it, and makes sure it’s smoother out over time to prevent nasty surprises.
The last great bookkeeping hint we have for you is to regularly check off your invoices. Unpaid invoices hurt cash flow and can cause chaos. Make sure that a standard process is followed for unpaid bills.
Bookkeeping is actually not as hard as it’s often made out to be- keep records and keep track, and you’ll be just fine.
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