Six Tips for Great Bookkeeping
Bookkeeping - Six Tips for Great Bookkeeping

Six Tips for Great Bookkeeping

Published on January 1, 2018
Sam Inayat - Bookkeeping, Tax return and BAS expert

Senior Accountant at Top Accountants

Record keeping (also known as bookkeeping) is no one’s favourite task. However, the reality is if you own a small business, good record keeping is vital. Many start-ups, as well as existing business owners tend to neglect this aspect of their business until the end of financial year (EOFY) is upon them. By law, every business is required to maintain accurate and timely records.

I can’t stress enough how important it is to organize your accounts from the onset by setting up and using simple accounting software that suits your needs.

Here are 6 simple tips to make record keeping easier and less stressful during EOFY:

1. Allocate time each week and devote to your books

It is very important to be on top of this. Regular reviews will let you know how your business is going and allow you to control your cash flow.

2. Open a new business bank account for business earnings and expenses.

It is important to keep your private transactions separate from your business transactions. In time, you can apply for a business credit card and apply the same terms.

3. Get accounting software that suits your business needs.

If you are unsure which software to select, you may contact a business consultant or accountant that can better advise you before you buy. We prefer to use XERO andMYOB accounting solutions. With cloud software, one key benefit is that you can access your financials anywhere, anytime or have your bookkeeper or accountant check information for you.

Your files will always be backed up regularly in the cloud. However, always ensure you keep backups of your financial data as an added security measure. With desktop software, you will have to get into a habit of regularly backing up your files.

4. Get all your tax and compliance obligations right

All businesses are required to register for an ABN, and if your turnover is more than $75,000 then you must apply for GST registration. You must also keep receipts for all acquisitions in order to claim on your expenses. If you employ staff, you must also register for PAYG withholding Tax. This is where you pay staff and withhold some tax on their behalf.

You are also obliged to complete and lodge monthly/quarterly Business Activity Statement (BAS) with the ATO. With the appropriate accounting program and setup, you can have this information at your fingertips. This way you create systems to help you streamline and automate your business processes for you to stay compliant.

5. Keep your receipts

The ATO requires you to keep records for a minimum of five years. The records you are required to keep and have accessible upon request are:

You could create digital files on your computer to store this information or keep a well organised filing cabinet.

6. Or, get a great bookkeeper

As you expand your business you may need to engage the assistance of a great bookkeeper, keep in mind that this service is also tax deductible. Hiring a bookkeeper helps you focus on growing your business while ensuring your record keeping is up to date.