When it comes to organising financials for your business, we hear owners tell us all the time how they are going to become more disciplined with maintaining an order for their income and expenditures. By getting into a system of tracking and recording your transactions, you can save yourself time and headaches when the end of financial year arrives; you’ll already have everything you need to supply to the ATO.
Keeping your accounting in order must be an achievable goal, so we’ve highlighted a few points to get you started on getting your financials organised.
Use Dedicated Business Bank Accounts
Ensure that you set up a separate business bank account. Your personal bank account should be used purely for personal transactions, and all business transactions should be made with your business account. Never mix the two; it’s a recipe for disaster.
Control Your Debtors
Businesses often have clients who forget to pay their invoices on time, which opens up issues with cashflow for your business. It may result in you delaying making your payments, or having to hold off on additional purchases that may be an investment in the growth of your business. Either way, ensure you have a system in place to chase those who owe you money in a timely fashion. There are programs that can do this automatically, such as Debtor Daddy, Xero and Chaser, to save you time from chasing debtors manually.
Invest in Cloud-Based Bookkeeping Software
If you have an easy way of recording transactions, you’re more likely to stick to keeping your bookkeeping organised. Xero is online accounting software that offers a fool-proof way of keeping up to date with all aspects of your business financials. It’s an extremely user-friendly cloud-based program which means you can access data from any device, in any location. No excuse not to keep on track even if you’re away from the office!
Keep Your Receipts
One main reason why business owners dread getting started on their bookkeeping is that they must find all their receipts. Are they stored in a filing system? In your wallet? In a shoebox? Setting up a good system for storing your receipts saves so much time in the long run, and saves you re-thinking where that safe place was for that purchase you made months ago. Find a filing system that works for you. We recommend storing receipts digitally, and saving them to the cloud. That way, there’s no chance of losing anything, plus you can access from any location.
Outsource If It’s Beyond Your Expertise
Whilst all business owners have the good intentions of sticking to a well-thought-out system for their transactions, skill set and time are a couple of reasons why this doesn’t always go as planned. As a business owners, your time should be dedicated to growing your business, not tracking that purchase you made last year, for example. You may also lack the expertise required to ensure everything is completed as required for lodgement at the end of each quarter. Either way, if it’s something that you can’t allocate your time or skills to doing, engage an external bookkeeping company who can work for you and your business. The last thing you want to do it leave it until the tax man comes knocking.
By becoming more organised with your bookkeeping, you will save yourself time and money in the long run. Make time to devise a system that works for you. You’ll be glad you did when it saves you a whole lot of stress when it comes to making lodgements and preparing your tax return. Talk to Carbon’s team of bookkeepers if you need any help.