Monthly Archives: September 2018

28 Sep

5 Basic Roles of a Bookkeeper and How You Can Benefit From These

Accounting will be an important part of your business no matter the size. What may change is how complex a system you need, how much time has to be invested, and how much expertise it will require. Luckily, a trained bookkeeper can meet these needs no matter how big or small, and the basic roles he or she plays will help tremendously.

5 Basic Roles That Will Benefit You Greatly!
– They Keep Your Day-To-Day Finances Organized

Having a handle on your cash flow requires knowing what is coming into to your business and what is going out on a regular basis. You should, therefore, keep track of your company’s daily accounting matters and this can be time-consuming, frustrating or downright impossible depending on how little you understand about the process. Outsourcing to a bookkeeper means you get someone who is always looking after this aspect of your business so that you can focus on others.

– Bookkeepers Help to Implement Systems that Make Your Accounting Role Easier

One of the first things a good bookkeeper will do is assess the accounting system you currently have in order to see what services you will need. Once this assessment is done, he or she will show you how to improve your system or help you to implement one that will allow things to flow smoothly between the two of you. This benefits you since it provides a way for you to improve; plus, it ensures that you are able to share the information your bookkeeper needs in a more efficient manner.

– He or She Should Give Sound Budgeting Advice

You need a firm understanding of what can be considered investments, what are expenses, which invoices have not been collected, which bills to pay as well as which ones can be delayed, among other things. Having a bookkeeper means having someone on your side who has this knowledge. It also means having someone who can help you understand what proper budgeting means and how to implement it.

– They Generate Reports as Needed (Using Your Company Data)

Financial reports will be important from time to time. These may be needed at the end of an accounting period, for tax purposes, when seeking a loan or when approaching a possible investor. Part of a bookkeeper’s role is to generate such reports from the company data you would have already provided. Also, he or she would also save you the hassle of updating said data if that needed to be done before running the report.

– Hiring a Bookkeeper Helps You Save Money

The advice, increased efficiency and overall expertise that come from using a bookkeeper will almost certainly save you money. In addition to this, you will spend less on an outsourced bookkeeper than you would spend on a permanent accounting employee. A bookkeeper, therefore, helps you save by showing you how to spend less and by costing you less overall.

These are not the only basic roles a trained bookkeeper plays. In fact, a good bookkeeper will also ensure that you remain compliant. This means he or she should have a firm grasp of laws and industry regulations that you may end up violating due to your lack of training.

28 Sep

4 Reasons to Drop Your Current Bookkeeper

Unfortunately, there are a lot of bad bookkeepers out there. If your bookkeeper fits any of the following characteristics, it might be time to consider looking for a new one:

Reason 1: Your bookkeeper does not have time for you.
Nobody wants to work with a bookkeeper who is always behind on work. When you ask for information, you want to receive it as soon as possible. You need to work with a bookkeeper who is motivated, efficient and offers clear communication.

Reason 2: They never make suggestions.
It’s not enough to fill out forms and hand you reports when you ask for them. Your bookkeeper needs to be honest with you, telling you when there are problems and bring ideas to the table. You should feel trust with the person managing your finances.

Reason 3: They don’t appear to be doing anything at all.
If you can’t explain to somebody in one sentence what your bookkeeper has done for you, it might be time to start looking for a new one. Staying involved in the process also ensures that there is no theft going on.

Reason 4: They have poor communication skills.
Think about the way you respond to clients – do you leave them hanging? Once you express your need to have the regular discussion regarding your finances, your bookkeeper should make an effort to call or email regularly to check in.

28 Sep

Understanding the Differences Between a Bookkeeper and an Accountant

Like many outsides of the field of accounting, you may be unclear about the differences between a bookkeeper and an accountant. As a business owner, this differentiation is important to make since it will help you to understand what your company’s accounting needs are. Doing so will, in turn, assist you in getting the help you need.

The Traditional role of a Bookkeeper

The bookkeeper is at the very start of the accounting process because he or she is responsible for keeping track of the firm’s daily expenses. The traditional purpose of this professional is to note all financial transactions for the company for each day in chronological order. This means bookkeepers are entrusted with overseeing your ledgers, journals or whatever book of accounts you keep.

What an Accountant Does

An accountant uses the information your bookkeeper compiles to complete the other processes in the accounting area of your business. These include classifying, summarizing, reporting and analyzing your financial data. Accountants also interpret said data and may even be responsible for recording some financial information as well.

How the Nature of Outsourcing Changes Some of This

The roles of both positions are no longer as clear-cut these days. In fact, bookkeepers are also called accounting clerks and some may have roles that extend far beyond the traditional job description for their occupation. This is mainly so because each company’s structure will determine what they need and this need will determine the tasks that make up each job description.
In addition to this, many freelancers and companies that offer bookkeeping services are aware that their target audience needs someone to do more than just chronicle their daily financial transactions. This understanding has led to an increase in the services that many offers to those who use outsourcing to fill these needs. The effect is that many bookkeepers serve a broader purpose while still providing add-on services at extra costs.

What This Means for You

While it may not be official, the broadening of the term “bookkeeper” means that you get more for your money. Not only do you get the traditional services offered by bookkeepers, but you also get some accounting benefits even if these are basic. You can, therefore, tailor how much you spend on an actual accountant if anything at all. All companies can benefit from this, but small businesses seem to be reaping the greatest rewards since most cannot afford to employ an accountant.

Shopping Around

While there may be standard prices, not all bookkeepers will charge the same exact amount. Furthermore, not all of them will offer services that are suited to your business. Looking around allows you to find services that will benefit you, prices you are more likely to be able to afford, and it will give you a better idea of what each company or individual bookkeeper considers cost-cutting actions that will help you spend less for their services.

27 Sep

How to Make Third-Party Bookkeeping Affordable On Your Budget

Running a business can be hard no matter who you are. Furthermore, things can be worsened by a lack of organization and a poor understanding of good business practices, both of which can lead to messy bookkeeping. Luckily, improvement in the first two areas can help you take better control of your business’ finances and can, in turn, make third-party bookkeeping more affordable, even on a tight budget.

3 Ways to Reduce How Much You Pay for Bookkeeping Services

Get Organized

It may seem scary in the beginning, but if you decided to start a business it means you are brave enough to face the problem. That said, start sorting those past receipts, invoices, list of owing customers, or anything you have that explains/proves how much money is coming into the company and going out. Remember that the key is not to be perfect, you are merely reducing a mess of financial papers to more understandable groups/categories.

Implement an Easy System

The last thing you want to do is recreate the mess once you have sorted the stuff you already had, so a system is vital to avoiding the stress of the first step. The easiest way to do this is to get file jackets, shoe boxes, or other containers to put the different types of bills or receipts in. Label these and be careful to put the right things in them.

Cooperate with your Bookkeeper

A competent and thorough bookkeeper will assess your needs and help you devise an official system to keep your day-to-day finances under control. This will be a collaborative effort that will start with you, so you have to play your part. Plus, the easier you make the job the less it is likely to cost. In short, do not pay the fee for an office visit when you simply have to send digital copies, do not fail to send in receipts as requested thereby causing a month-end rush, and avoid paying to redo a report because you failed to supply everything needed.

The Benefits to You

Companies or freelancers offering bookkeeping services often charge per hour or based on the complexity of the task (i.e. the level of service needed). Therefore, any level of organization will reduce the time or effort used. Less work on their part equals less money on yours, so you save just by rolling up your sleeves and tackling that mountain of paper.

In addition, you reduce the time your bookkeeper has to wait for new information which will make it easier for him or her to keep your daily finances updated. This will, in turn, remove the rush to organize things as well as any additional fees this may cost. However, the benefits that go beyond upfront savings will depend on your own company.

Bookkeeping to the Rescue

Luckily, a good bookkeeper can assist whether you get organized or not, so there is no need to panic if you are unable to. In fact, we can may it affordable while still saving you the hassle of tunneling through all that excess paper. Simply contact us today to see what we can do for you.

27 Sep

5 Benefits of Getting Reckon Accounting Software for Your Business

Finding the right accounting software can be difficult with all the choices out there. This is why Reckon (formerly known as QuickBooks) is such a sought-after choice. Besides being a trusted name in the industry, it also has options that are tailored to different small business needs so you do not have to buy more than you require.

Why You Should Consider This Product
1) A computerized accounting system has many benefits: Computerized accounting packages carry many helpful features. These features make data entry faster and more accurate, they make generating reports faster, and they help simplify filing your taxes. They also help you spend less on accounts-related processes like audits.

2) It may make choosing easier: Reckon has four desktop programs to choose from, and each one is designed with a specific small business model in mind. The current options are categorized for sole-traders and micro-businesses, small businesses, small businesses that have employees, as well as home-operated businesses. The features are therefore tailored to suit the needs of each model and so are the prices.

3) It is a powerful yet affordable “off the shelf” accounting system: Reckon gives you full control of your accounting matters yet, it is rather inexpensive for a tool of its kind. In fact, compared to big businesses that have internal systems created, you are getting fast implementation and lower overhead costs. The money you save over time can also be considered as a part of the program’s affordability.

4) You are choosing a name with a track record you can trust: With so many options flooding the market, there is a certain peace of mind that comes with finding a name you know you can trust. While the name “Reckon” is still relatively new, the name “QuickBooks” is not. It is the same program so you get the same legacy.

5) You get a professional program without needing the technical “know how”: Reckon allows you to work like a pro without being one. Plus, you will learn a lot as you master the system. This should make it much easier to understand your financial reports and keep your finances organized even if you take time to adjust.

Best of all, Reckon has an online option that can be used alone or in combination with your desktop version. This product works with your PC, Mac, Ipad and Android devices which means you can update your information on the go instead of waiting to get back to the office. It also means constant access to your files; plus, multiple persons can gain access simultaneously.

Note however that using Reckon will not remove the need for further accounting processes. Instead, it acts as the core or first step since it involves organizing the data. You may still find it impossible to vigilantly watch your day-to-day finances because you have other things to worry about, so a bookkeeper is still good to have despite buying your software. A bookkeeper can also do everything you need done with the inputted data so you only have to focus on making your entries, and even that part can be outsourced.

27 Sep

Bookkeeping Basics Jargon

Have you ever come across bookkeeping jargon that didn’t make any sense? The aim of our bookkeeping basics blog is to answer your questions and assist you throughout your small business journey – it’s an exciting time and we would love to support you along the way! Although we recommend outsourcing bookkeeping services if you’re self-managing your books through small business bookkeeping, here’s our list of most commonly used bookkeeping terms with explanations of each.

> Accounting period: The time period for which financial information is being tracked. Most businesses track their financial results on a monthly basis; in this case, each accounting period would equal one month.

> Accounts payable: The amount owed by a business to its suppliers or vendors for goods and services purchased on credit.

> Accounts receivable: The amounts owed to a business from its customers or clients for goods or services provided on credit.

> Assets: All of the items a company owns in order to successfully run its business. This could include buildings, tools, equipment, land, furniture, vehicles, etc.

> Auditors: third-party accountants who review an entity’s financial statements for accuracy and provide a statement.

> Balance sheet: This is a financial statement that presents a snapshot of the company’s financial position on the particular date. It is called a balance sheet because the assets must equal the liabilities and equity (see below!)

> BAS: Business Activity Statement. If you are a business registered for GST you need to lodge BAS. Your BAS will help you report and pay your GST, PAYG installments, PAYG withholding tax, and other taxes. Bookkeeping services will lodge BAS for you.

> Bookkeeping Software: There is a range of bookkeeping software available but it’s important to know which will best suit your business from day one; whether it be Xero bookkeeping & Xero cashbook, MYOB bookkeeping or QBO. Your bookkeeper can help with this decision!

> Break-even Point: The point in a business’s operations where revenue is sufficient to cover expenses.

> Chart of Accounts: The set of accounts used by a business that make up its general ledger. These accounts are standard to that organization.

> Depreciation: An accounting method used to track the aging and use of assets.

> Double-Entry Bookkeeping: A system in which every transaction has a corresponding positive and negative entry (debits and credits).

> Equity: All of the money invested in the company by its owners.

> Expenses: Money spent to operate the company that is not directly related to the sale of individual goods or services.

> General Ledger: Where all the company’s accounts are summarized.

> Income statement: The financial statement that presents a summary of the company’s financial activity over a certain period of time (i.e. a month, quarter, year).

> Journals: Where bookkeepers keep records of daily company transactions. Each of the most active accounts, including accounts payable, and accounts receivable has its own journal.

> Liabilities: Debts that the company owes. This could be loans and/or unpaid bills.

> Payroll: Managing payroll is often a key function of a bookkeeper and involves reporting aspects of payroll to the government.

> Revenue: All money collected in the process of selling a company’s goods and services. Revenue can also be collected by selling assets the business no longer needs.

Finally, let’s define the biggest question of all: what is bookkeeping? A bookkeeper will organize all the financial record-keeping that you may not have the time or knowledge to do properly. They can also provide insight into potential financial issues in the business.

Even if you are several years behind on your bookkeeping, a bookkeeper can get your business back on track and provide training to ensure it stays that way. Your bookkeeper will also prepare & lodge BAS, organize payroll, they can practice double-entry bookkeeping and sort your superannuation; whatever your business might need.

25 Sep

Making the Most of your Software

1. CHART OF ACCOUNTS
Your Chart of the Accounts is like the spine of your business. You should have your Chart of Accounts set up by a professional BAS or Tax Agent so that the following can be seen easily: –

a. Your income – this can also be broken down to exact goods or services. However, you should only break down your income into categories if you need this information to grow or direct your business. For instance, you may be a construction company that does both commercial or residential construction. It would be beneficial for your Chart of Accounts to reflect both sources of your income so that you could determine where the majority of your income came from.

b. The same theory applies to your expenses. You should try to separate only the items that you need to track. Again, if you are a construction company, you would not need to split your stationery into categories as you would not need this information. However, you may like to record your expenses against a ‘job’ so that you could track your expenses in relation to certain jobs. This makes certain that you’re quoting the right price for the job and not losing money.

c. Some of the common mistakes, that we as BAS Agents see, our clients that make their own Chart of Accounts and do not understand the differences between Assets, Liabilities, Income, and Expenses. Getting these wrong can greatly affect your Balance Sheet, Profit and Loss and therefore your income tax obligations.

2. KEEP IT UP TO DATE
Keeping your software updated is a safe way to ensure that no-one can steal your money through this platform. The government (ATO) already have the authority to check your bank accounts and records, so not utilizing this technology is only affecting you and/or your business. Up to date information can help you to make better business decisions!

For example, you own and run a hairdressing salon. You sell hair products and have two staff members. Do you know when you need your staff members at the salon? Do you know which of your products you make the most money on? This is not really dependent on volume, this is dependent on margins. If you have the ability to connect your business bank accounts to the accounting software, make sure to do so!

3. AUTOMATE AS MUCH AS POSSIBLE
This is the fun part! Depending on what industry you are in, you can utilize the right accounting software with ‘add-ons’ and take advantage of all the artificial intelligence that this will provide to your business. For example, you are in the food and beverage industry. Your ingredients will be a portion of GST FREE and GST included. It can take hours to go through each receipt and invoice to make sure that the GST is portion is correct. Using an app, such as Receipt Bank, this part of the data entry can be automated and pushed straight through to your accounting software.

25 Sep

Bookkeeper VS. Accountant

Have you ever wondered if there is any difference between an accountant and a bookkeeper? The truth is, there are plenty of differences between accountants and bookkeepers; both serve a different purpose; both of which offer huge benefits to your business.

Let’s first answer the question: What is bookkeeping?

What do bookkeepers do? In simple terms, a bookkeeper will organize all the financial record-keeping that you don’t have the time, patience or knowledge to do properly. They can also provide insight into potential financial issues in the business. A good bookkeeper will be a huge asset! Some of the key roles of a bookkeeper include:

•Expense Tracking
•Data Entry
•BAS Preparation
•Lodge BAS
•Invoicing and Receipts
•Accounts Management
•Accounts payable and receivable
•Debt & Cash Flow Management
•Software Training
•Payroll, Payment Summaries & Superannuation
•Banking & Bank Reconciliations
•Compliance

•Financial Reporting & Analysis

If you are a small business owner, you shouldn’t be looking towards your accountant to provide small business bookkeeping services; as they are completely different to accounting services! You already have a lot to run and organize for your business, so engaging in bookkeeping services would be enormously helpful to your business. While it may seem to make sense to have your accountant do your bookkeeping for you, it’s important to remember the differences between these services. Here are three reasons why you should utilize specific bookkeeping services

Reason #1: As a business owner it’s easy to think that your accountant may as well do your books as well. In reality, it is far more cost effective for your business to have a professional bookkeeper do your bookkeeping for you. This is because your accountant’s hourly fee will increase significantly (in some cases up to double) to include bookkeeping services. Additionally, many accounting firms don’t employ certified Pro-Advisors and therefore might refer your job to an outside firm that doesn’t really know your business.

Reason #2: Accountants and bookkeepers work well together! Your accountant’s job is to save you money in the area of income taxes and to prepare you for filing with the IRS. Your bookkeeper’s job is to help you manage your books on a consistent basis so that they can help you get organized and save you money when you submit your financial information to your accountant at the end of the year. A bookkeeper is preparing your books so that they are organized and functional for your business, and to assist you to make better-informed business decisions throughout the year, as well as providing you with an ongoing snapshot of how your business is doing. These are very different goals which yield different results, but when put together can provide great value to your business.

Many bookkeepers will also practice double-entry bookkeeping to minimize errors and increase the chance that your books will balance. (Double-entry bookkeeping is so called because the process involves entering all transactions twice). This is just another method a bookkeeper will use to ensure that everything is done correctly and legally for your business.

Reason #3: A bookkeeper can help you to use bookkeeping software to grow your business. Certified Pro-Advisor can make your Quickbooks experience fun because you’ll be able to see all the benefits and where you’re making money! While your accountant focuses on what the IRS needs to know, your bookkeeper is focused on what YOU as the business owner needs to know in order to successfully run and grow your business.

In addition, the bookkeeping software available comes in many different formats and it can be difficult to know which is best for your business needs and circumstances. Your bookkeeper will be able to discuss your business with you, go through the bookkeeping basics so that you have a good understanding, answer for you some of the commonly asked questions such as “what is bookkeeping”, and make a recommendation as to which software will best serve your requirements. Some of the well-known software includes Xero bookkeeping and Xero Cashbook, MYOB Bookkeeping, QBO, and Quickbooks Online Account.

It’s worth seeing the value that a bookkeeper can bring to your business and consider investing in bookkeeping services. Successful bookkeeping can help your business by ensuring that everything is done legally and correctly; but also that you’re saving money and ultimately making money.

If you’re still unsure about bookkeeping services or where to start, please don’t hesitate to get in touch with us; we’ll be happy to answer any bookkeeping questions you may have.

25 Sep

Best Practice Bookkeeping Habits

The aim of our Bookkeeping Basics Blog is to support our small local businesses. We know that running a business can be busy and stressful at times, to say the least – that’s why we want to assist however we can, by taking care of the numbers and paperwork (all the “tedious” but necessary parts of running and growing a business!)

What is the bookkeeping? Put simply; bookkeeping involves organizing all of the financial record-keeping that you might not have the time, patience or knowledge to do properly. This is to ensure that you are given a consistent insight into the financial position of your business. A good bookkeeper will be a huge asset!

Although we strongly recommend utilizing bookkeeping services (mainly for accuracy, time-saving purposes, and peace of mind), if you are managing your own bookkeeping for now or just starting your business, here are some small business bookkeeping habits that we recommend, to ensure that you’re on the right track:

Know your Software. Bookkeeping software comes in different forms and it can be tricky to navigate which one will be best for you, depending on your business needs. It is also essential that the software is set up correctly from the beginning, to avoid mistakes or doubling up in data entry. We usually recommend MYOB bookkeeping, Xero Bookkeeping & Xero Cashbook or Quickbooks, but it really does depend on what you are using it for. Get in touch with your local bookkeeper to see what they recommend & schedule in a training session so you’re set up correctly from day one. Utilising the correct bookkeeping software and knowing how to use it can save your business lots of time and money!

Record Receipts. Make sure you are always ensuring customer receipts and income is recorded correctly (and as soon as possible to avoid mistakes). Also ensure that you are obtaining invoices for each purchase and that the payment method is logged. It may seem like you’re over-doing it, but it’s important that you practise high attention to detail so that items are easy to track if necessary later on. Double entry bookkeeping is a great way to ensure that you’ve recorded correctly, as it involves entering everything into the system twice.

File Paid Invoices. You should be able to do this online with your accounting software – simply open up a new file at the beginning of each financial year and upload your paid invoices and paid bills into this folder.

Don’t use too many categories – it can cause confusion! For example, some businesses use sub-categories such as “Paper, Pen, Ink,” etc. when they could have been collected simply under “Office Equipment” or “Stationery Supplies”. At the same time, avoid creating a “Miscellaneous” category at all costs!

Consistency is key! Hence why we suggest “habits” to ensure you are going through the correct processes each time. Try to maintain records of the above weekly – the longer you wait, the harder it may be to get back on top of things.

The goal of these habits to ensure that you are always on top of your small business bookkeeping – that you’re organized and everything has been done correctly, legally and on time.

However, even if you are several years behind on your bookkeeping, a bookkeeper can get your business back on track and provide training to ensure it stays that way. Your bookkeeper will also prepare & lodge BAS, organize payroll, superannuation, data entry; whatever your business needs. You’ll have the expertise of knowledge, consistency of data entry, ongoing backup support and only one invoice to pay each month at a flat hourly rate.

24 Sep

What is Double Entry Bookkeeping?

What is Double Entry Bookkeeping?
In order to explain the concept of “double entry bookkeeping”, let’s first address the question: what is bookkeeping?

In simple terms, small business bookkeeping & general bookkeeping involves organizing all of your financial record-keeping to ensure that you are given a consistent insight into the financial position of your business. This continuous data entry and tracking is often referred to as the tedious, boring stuff! That’s why bookkeeping services can be a timesaver and an asset to your business.

So, what is double entry bookkeeping?
The double entry system means that each financial transaction of a company is recorded with an entry into at least two of its general ledger accounts.

For example, if a company borrows $5,000 from the bank, the company’s asset account is increased with a debit entry of $5,000 and the company’s liability account is increased with a credit entry of $5,000. If the company then repays $2,000 to the bank, the company will decrease the amount in its asset account with a credit entry of $2,000 and will reduce the balance in its liability account with a debit entry of $2,000.

Double entry bookkeeping requires that the debit amounts must always equal the credit amounts. Every account has two “sides”. A debit refers to an entry on the left side of an account, and a credit refers to an entry on the right side of an account. Double entry bookkeeping requires that for every transaction, there is an entry to the left side of one account, and a corresponding entry to the right side of another account. Every debit must be matched with a credit!

Today’s bookkeeping software often has double entry bookkeeping programmed into it. Examples of commonly used bookkeeping software include MYOB bookkeeping, Xero bookkeeping & Xero cashbook. Although this software has been built for convenience and ease, it’s still very important to ensure that everything is entered into the software precisely and correctly to avoid error. Your bookkeeper can practice the double entry bookkeeping system to ensure absolute accuracy.

Bookkeeping services can also include organising payroll, superannuation, data entry, and to prepare & lodge BAS; whatever your business might need to run smoothly and successfully. The benefits of small business bookkeeping is that you have the expertise of knowledge, consistency of data entry, ongoing back-up support and only one invoice to pay each month!

One of the main goals of our Bookkeeping Basics Blog is to support small business! We understand that despite the associated rewards, the running of a business can be extremely stressful and time-consuming to say the least. Our aim is to free up some spare time by taking care of the numbers and paperwork (all the fiddly little parts of running a business – often referred to as “the boring stuff”!)

If you think your business might benefit from bookkeeping services, please don’t hesitate to get in touch; we’ll discuss your business needs and tailor a package that is right for you and your business.

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