Adopting some good habits in your small business can help control your cash flow and avoid costly errors. Having a business plan is number one. All businesses have cycles so it always good to project three to six months ahead when it comes to cash flow as you need to know how much money will be coming in and when.
One of the main reasons though that small businesses struggle is because there isn’t a good bookkeeping system in place. A lot of small business owners are great innovators, have plenty of enthusiasm and are the best sales people around but struggle with the financial aspects of their business. Even the best accounting software is useless if you cannot input or understand the data.
My favourite saying is you can do anything but not everything. That is where often hiring an accountant is smart business.
Natasha at ND Accounting and Taxation Service started her own accounting and taxation practice in Warrawong in 2009. With this experience and the experience of assisting hundreds of businesses in Shellharbour, Warrawong, Wollongong in fact all of the Illawarra and afar, I asked Natasha for information on record keeping and bookkeeping to assist you with your small business.
So it firstly became apparent, long gone should be the days where you are paying your accountant or tax agent to sort through a shoebox of paperwork. By giving your accountant well prepared records you are paying them instead to help you with your business.
Setting up a bookkeeping system
It can be difficult to set up a good system without a bookkeeping background. You have the choice of setting up your bookkeeping manually (using accounting books), electronically (spreadsheets) or use accounting software, which is usually the most efficient choice.
Natasha advises to make sure you choose a software package that meets your business needs and the ATO requirements and recommends that you consult with your accountant on the best software for your business.
What are the advantages of accounting software?
One of the main advantages accounting software is that it enables you to use your time more efficiently.
Natasha has outlined some key features that software includes:
- Recording your business transactions, including income and expenses, payments to workers, and stock and asset details
- Automatically tallies amounts and provides ready-made reporting
- Produces invoices and provides summaries and reports for GST and income tax purposes
- Keeps up with the latest tax rates and tax laws, and rulings
- Allows you to report certain information, such as your activity statement, to the ATO electronically (if the package meets the ATO requirements)
- Requires less storage space and allows you to back up records.
- Both you or your accountant can access financial information easily from different locations
Should I hire a bookkeeper?
Natasha says, “Businesses tend to not hire a bookkeeper soon enough”.
The main benefit to hiring a bookkeeper is that it frees you up to concentrate on your business. A bookkeeper is efficient, often completing the tasks in half the time as that is the job they do day in and day out.
What does a bookkeeper do?
Natasha advises a good bookkeeper is able to:
- Set up accounting systems and software properly
- Enter transactions
- Perform checks, reconciliations and end of year processes
- Ensure they are up to speed with legislative requirements and management reports
- Undertake payroll duties and compliance
- Prepare BAS returns, as a registered BAS agent or under the supervision of a registered BAS agent
- Provide general business administrative support
Natasha says, “The most important part of working alongside small businesses is helping them understand the numbers, improve the cash-flow and save money in the long term. It’s never too late to save time and stress less by starting a good record keeping system or bookkeeping system for your business.”
After speaking with Natasha at ND Accounting and Taxation I would suggest if you are in business or thinking of going into business and need accounting, taxation or bookkeeping services in Warrawong, Shellharbour, Wollongong, in fact anywhere in the Illawarra call 4272 3048. ND Accounting and taxation in Warrawong can create a tailored solution for your business.