Keeping your software up to date
Making it a habit to regularly check the status of the accounting software being used, then performing updates and backups will be an important task for most bookkeepers in small companies. Larger entities will most likely have in-house computer experts to keep the software up to date, but for the others, including contract bookkeepers, the habit of setting reminders for this important task is on top of the list.
Daily data entry
Next, is the important habit of entering all daily transactions on the day they occur, or if that’s not possible, within the week they occur. Sometimes it may seem more efficient to leave customer receipts, invoices and other source documents until there’s a sufficient mass to occupy an afternoon of putting them into the software. This is a dangerous practice because if management requests a report unexpectedly, none of these transactions will be there.
Also, a recurring nightmare for accountants with small business clients who do not have a regular bookkeeper is to be handed a large box full of transaction documents and be asked to prepare a yearly tax return. Leaving all the data entry until this point in the financial year not only creates a huge workload but also, the owner has missed out on the benefit of reporting information that informs key decisions.
Keep digital copies
The third important habit is to keep the filing up to date. Some micro-businesses may still use a paper-based system, but the most efficient way to keep everything readily accessible is to upload the documents into the filing systems built into the software. This still requires setting up a system of folders for each financial year, appropriately named to suit the business.
It is also important to remember that there are certain documents that the ATO requires businesses to keep for sometimes up to seven years, so this habit is essential to providing the correct documents in the event of a tax audit. Also, remember that any filing system is useless if documents cannot be retrieved when they are needed.