Hiring a bookkeeper keeps every business owner sane as they are provided with regular financial reports that determine the financial state of their business. Managing payroll, monitoring expenses, tracking income and paying taxes are just some of the tasks a bookkeeper should carry out. While bookkeepers know best, you still need to take part in ensuring that your business is in good hands. It all starts with asking the right questions.
Many business owners are completely clueless about their business performance. More often than not, they rely on bookkeepers to provide numbers, but without basic bookkeeping knowledge, understanding the records will be a challenge. Business owners who are eager to know where their business currently stands should know whether or not their business is profitable. Your bookkeeper can make comparisons between financial performances in the previous years. Once you know how to compare business performance, you will have an idea if you still have sufficient cash.
Since monitoring your expenses ensure your cashflow is intact, you also have to ask your bookkeeper how much you are spending on a regular basis. When paying wages, make sure computations are correct. You should also take note that the benchmarks for wages costs will vary from business to business.
It is never easy to move forward if you have no idea how to grow your customer base. However, making an investment to seasoned business owners is already a breeze because they have the ability to integrate customer relationship management and job management software packages. As a result, business owners can gain a better insight into their current customer base. When you have an idea who your customer base is, you can formulate marketing initiatives and planning so you will be able to grow your business.
Business owners need to sit down with their bookkeeper to obtain information tailored to the needs of their business. Each and every business has needs and these needs will not be addressed unless a business owner has an honest conversation with the bookkeeper. Even if you are the business owner, there are still some aspects of your business that you need help with. You should know who your top customers are. Your bookkeeper can provide recommendations and even help you understand how your business works.
Business owners do everything to save money and generate profit. If you ever know about a business owner who skimps on bookkeeping, it should not come as a surprise because this is part of their cost-cutting measures.
DIY bookkeeping is a common practice among small business owners. Since running a small business means less obligations, they can dedicate most of their time to monitor their income and expenses. However, things can get unpredictable especially when you plan to grow your business. At a glance, your financial performance may be doing well, but scratching beneath the surface will reveal the small cracks.
A bookkeeper should be treated as an investment rather than an extra expense. In the long run, you will realise that your cash flow is intact because your bookkeeper sees to it that you have enough money for future investments and monthly expenses. There are many reasons a bookkeeper is essential regardless of the size of your business.
A simple oversight can result in committing costly mistakes. When generating financial reports, your business can be at stake if you miss out on ensuring that the numbers are accurate. Bookkeeping reduces these errors by checking every detail on the report. Bookkeeper’s full attention ensures that major errors are not registered.
Proper bill handling is important to prevent penalties and extra fees. Late payments affect your cash flow because you need to pay for the penalties, which is an additional expense. A bookkeeper can take care of this essential task so you minimise the risk of penalties.
Although you already know the financial standing of your business, it does not give you an assurance you have a much deeper understanding of your business performance. A bookkeeper can explain what is going on by giving you a detailed account of your finances.
Chasing after clients can be time consuming. A business owner does not have all the time in the world to take care of this essential aspect. Hiring a bookkeeper provides better invoicing by checking who has already made a payment. Reminders will also be sent to customers and clients who have not yet made a payment while you take care of business obligations essential to growing your business. A bookkeeper who prepares the books for you will give you stress-free and smoother transactions.
Financial literacy is essential to achieving long term success in spite of running a small business. Aside from keeping your financial records for tax purposes, there is a good reason proper financial management should be observed. Ever wonder why business fail? If you do not want to be part of the statistics, familiarising yourself with the fundamental of financial management will help you to put your business in proper perspective.
Your business plan serves as your road map to achieving success. Without a business plan, you will never know the direction your business is taking. A business plan helps you to set goals and face challenges. It keeps your eyes on the prize. Whether you want to get access to profit and loss forecasts, know your financial targets and budgets, a business plan will be critical to the process.
Good record keeping is essential no matter how established your business is. Since money is the lifeblood of your business, being completely aware how much you are getting and spending will give you a clearer understanding of your financial health.
Although many business owners find tracking expenses a boring task, one cannot argue that knowing the amount of cash you have will help you take total control of your finances. A business may be profitable, but without keeping your finances in check, being financially broke will not come as a surprise. Submitting detailed and accurate records is important especially when it comes to tax. Even with the use of bookkeeping software, being keen on checking the details is a must.
You cannot achieve peace of mind unless you understand your cash flow. Savvy business owners understand that cash flow is essential to any future business plans. Whether you want to grow your business, explore additional business opportunities or simply keep your cash flow intact to regularly pay monthly expenses, a steady flow of cash is important.
Having a better picture of your business performance will help you understand where your business stands. Bookkeepers and accountants are crucial to the success of your company. They offer tailored advice based on your financial position. Having someone who identifies your business needs will lead you in the right direction. While outsourcing financial management to bookkeeping professionals may be costly, the numerous benefits still outweigh the cost.
A receipt is just a small piece of paper where your purchases or transactions are reflected. Most of the time, these receipts find themselves inside the trash can because business owners prefer to take a mental note of the
transactions instead of diligently filing these receipts. While one purchase is easy to remember, you can get sidetracked by other obligations. That single purchase can easily slip your mind when you have many things to take care of.
As they say, you will never know what you got until it is gone. The same is true with keeping receipts. They may not seem to be valuable, but they are part and parcel of record-keeping. They play a part in monitoring your expenses. If you take the time to capture receipts paid with cash, it will be easy for you to know how much you are spending on a daily basis.
Capturing your business expenses is a daunting task unless you make it a habit to reconcile your bank account. One mistake that business owners make is mixing personal expenses with business expenses. This is a bad practice because it makes the monitoring process more difficult than you know. As your expenses increase, the process of assessing your spending habits becomes a challenge.
Keep in mind that the purchase includes GST and ignoring it can spell trouble for you. Miscalculating your expenses can also hurt your taxes in more ways than one. While the damage is reparable, you will need to pay for penalties and late fees. The payment for these fees are often taken from your cash flow. When your cash is spent unnecessarily, opportunities become limited.
1. If you have paid your transactions by cash, be sure to collect receipts or even capture information. Using a smart phone app, you can take a photo of your receipts. This way, you will have an instant copy of every transaction you make. This is a smart habit for those who tend to forget keeping a record of receipts during lunch meetings and business travels. There are many apps you can download, which will enable you to snap a photo of receipts and send them in just a few taps.
2. Use your business account for paying business expenses. If you have made a purchase of your office supplies, never attempt to use your personal account for paying them. Pay for your purchases by transferring private funds into your business account. It is easy to monitor your expenses when you have your own business account.
A business cannot survive without a steady flow of cash. In spite of the profits it makes, the lack of cash flow can result in losing your business. Why is cash flow management important? How can business owners ensure that there is enough money for future investments and monthly expenses? Proper cash flow management is the secret to having a steady cash flow. Sure some businesses have secret sauce to ensure survival, but there are simple rules that are crucial to the survival of every company. If you manage your cash flow intelligently, you will be able to reduce error, plan for the future and manage your company’s spending habits. A few survival tips will not hurt:
Handling your finances requires tracking everything so you will know what is coming in and what is going out. Simple oversights will result in losing track of your expenses. Tracking everything means you should monitor how much you are spending on company lunches and travels in real time. When you have a real-time view into cash flow, you will be able to have the ability to manage your cash flow efficiently.
It is not enough that you generate a financial report because you should also understand whether or not your business is running smoothly. It is easy to misunderstand data unless you scratch beneath the surface. Got some questions? Ask your bookkeeper rather than assume that everything is doing perfectly fine. When information is outdated, the chances of making costly mistakes also increase. Make it a habit to consolidate your financial data to get accurate information. If you obtain financial information from multiple sources such as handwritten files, excel spreadsheets and some online tools, you can get confused in the long run.
Another reason your cash flow management is in chaos is due to manual bookkeeping processes. There are aspects of bookkeeping that you need to automate such as generating invoices. As your business begins to grow, it will be difficult for you to track clients who have and have not made payments. Automation bypasses the tedious process.
Are you doing good at spending? Do you always see to it that you renegotiate contracts and get a real-time view of your cash flow? If you want to drive growth, you need to know how to spot business trends. It is also necessary to formulate strategies that will improve your overall business performance. Costly mistakes can affect your business. However, if you are well-prepared, there is no other way to go but up.
Technology has made it easy for many businesses to take care of the most essential task:bookkeeping. Many business owners dread preparing invoice and tracking expenses. However, when the time comes that you need to grow your business, you need a financial report to find out if your business is ready for expansion. Bookkeepers ensure the financial success of your business. Without a doubt, they make job much easier by avoiding bookkeeping in a shoebox. Aside from taking care of the financial aspect of your business, bookkeepers are also intended to provide sound advice when it comes to financial management.
One thing that concerns most business owners is the ability of workers to finish the task. Since bookkeeping demands time and accuracy, payroll management , invoice preparation and other critical bookkeeping tasks seem to be a challenge. This is why it is necessary to choose the bookkeeping software that will not only reduce time consuming processes but also streamline workflow.
With plenty of advance business technology options to choose from, it is difficult to determine the software that suits your business needs. There are some elements of bookkeeping that you must keep in mind so you can narrow down your selection.
With the proliferation of virtual bookkeepers, more and more businesses have tapped into more advanced bookkeeping technology to stay relevant. Expense management requires regular monitoring so you will know if you still have enough cash flow to pay your bills or even to grow your business. Before you make a choice, you need to take the following features into account:
Big and small organisations consider choosing the right cloud provider to be a daunting task as there are different types of cloud services to choose from. If you are not accustomed to cloud technology, coming across various terms related to cloud computing can make the selection process more confusing. Before you dive into embracing cloud technology, it is important to understand their benefits, features and the type of cloud service you need for your business.
These days you can choose from three cloud service models, all of which have their own advantages and similarities. these services are Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS).
SaaS uses an environment that enables multiple users to stay connected through the web. PaaS has the ability to create and test applications with the use of a hosted environment from a cloud service provider. IaaS involves the use of hardware services from a cloud provider.
Aside from familiarising yourself with the different types of cloud service models, the percentage uptime or the cloud service level must also be taken into consideration. If a cloud service provider’s Service Level Agreement (SLA) is at 99.9%, this means they have a total of 44 minutes downtime on a monthly basis.
The options you have for cloud deployment are also worth-exploring. Just like the cloud service models, the cloud deployment options will also depend on your needs. All of the options have their own merits. These options are public cloud, private cloud, virtual private cloud and hybrid cloud model.
Public cloud uses a web interface, but storage and application are made accessible to the general public.
Private cloud has cloud-computing capabilities that enable organisations to use their own firewall. This option is designed for business use.
Hybrid cloud offers the best of both worlds as you get to enjoy the affordability of public cloud and obtain greater peace of mind with the flexibility and high level of security of private cloud. The model uses cloud and on-premise platforms.
Virtual private cloud offers a multitenant cloud-hosting environment which allow businesses to separate resources. More often than not, virtual private cloud offers higher level of data security.
Choosing the right cloud service for your business can be tricky because of the numerous options to explore. Make sure you choose the cloud model and service that is aligned to your business needs. This way, you will be able to maximise the effectiveness of cloud technology when it comes to providing mobility, flexibility and security to your business.
Bookkeeping may be one of your least favorite tasks unless you are having fun working with numbers. This is why some business owners deliberately ignore bookkeeping without realising it has a serious impact on their financial health. Bookkeeping involves record keeping so you will know if you still have enough money left for growing your business or for other business plans. Keeping financial details in your head will not help as there are too many distractions at work. For instance, you might be planning to get new bookkeeping software, but it has totally slipped your mind because of an urgent meeting with clients. A proper system and process in place will help you avoid any unpleasant surprises that may ruin your future plans.
Have you ever wondered why you are struggling with making ends meet despite making a huge profit? You might be missing out one important task, which is tracking your expenses. Lunches, special events and occasional travels can affect your business if you do not properly monitor how much you are actually spending. Preparing audit for these expenses can have a positive effect on your tax records.
When tracking your expenses, be sure to categorise everything. Driving long distances to meetings must also be tracked so you will know the cost associated with your travel.
Putting money aside for taxes will help prevent incurring penalties and interest from the ATO. Failing to set aside money for taxes is one mistake business owners usually commit. Interest and penalties can ruin your budget and may even have a snowball effect on your financial performance, especially when the money you put aside for your monthly bills has been used for paying late fees. This is not a smart move because the lack of funds will deter you from expanding your business.
Not keeping an eye on your invoices can hurt your cash flow. As a business owner, you need to assign a bookkeeper to track your billing. This way, you will know the people who have already made a payment. Some savvy business owners invest in a reliable bookkeeping system to ensure that no payments are missed and incurring penalties are prevented.
Handling your money wisely ensures you achieve your long-term goals and operate your business smoothly. These simple changes can also help you stay out of trouble with the ATO. Even if you are operating a small business, hiring a bookkeeper is a wise move.
Starting a business can be both exciting and challenging. It involves a lot of preparations and for you to cross the finish line, you have to focus on your goal regardless of the demands and distractions. Since a myriad of requirements must be complied in running a business, creating a checklist ensures you do not miss out any essentials. Aside from marketing and product development, you also have to think about finance and other important issues involving your business. Here are the steps to setting your business right:
Before you start a business, it is important to figure out the business structure, which is suitable to you. Whether you want to be a sole trader or in a partnership, trust or company identifying the business structure that works for you will help you weigh the pros and cons of each type.
Once you have chosen a business name, you need to get it registered before considering having letterheads, business cards, websites and logos. This is to ensure that the name is accepted by the Australian Securities and Investments Commission (ASIC). You will also have to decide whether or not your logo or business name should be registered as a trademark.
When you are registered to collect GST, you will need an Australian Business Number (ABN). This can be secured from Australian Business Register’s website. You will also need to apply for a Tax File Number (TFN) from the ATO if you are going to open a partnership.
For employees to make PAYG payments, their salaries must have taxable amounts. Without familiarising yourself with PAYG, you will never know how the payments are deducted. It is also important to seek advice from your accountant to ensure your business meets its tax responsibilities.
Your business cannot operate without securing national or local licenses. Aside from licenses, you will also have to check out the ATO’s fuel scheme information to find out if your business is eligible for fuel tax credits. Being familiar with the laws that apply to different products, services and businesses is also essential. You can check out Competition and Consumer Act or visit Australian Government Department of Industry to know your legal obligations. These resources are going to help you gain a deeper understanding about privacy laws, Australian consumer law and other legal responsibilities.
Some business owners think that major events such as a stock market crash has the biggest impact on finances, but bad habits are the ones that can expose your business to greater risk. While everyone wants to enjoy financial freedom, it does not necessarily mean you should not manage your finances well. More often than not, these risks can affect your actions and may even become a deterrent to potential business growth. If you want to make the right choices, you need to avoid these biggest risks:
Your business may be in the right direction, but this does not mean that you should be complacent about your business performance. Things can get unpredictable and without proper planning, you will not be able to overcome challenges. Whether you want to accomplish some business goals or you want to grow your business, be sure to create a plan for the future. This way, you will be able to have sufficient preparation that prevent you from hurting your business.
Investing is a sign that your business is ready to take risks. However, it can also be tricky especially if you are not prepared for the results. Before you invest, make sure you have done your research. It is not enough that you research how and where to invest because you should also get the best advice from experts.
Financial security does not take place without consulting a professional. If you own a small business, make sure you employ the right people that will be instrumental to the growth of your company. Putting the right people will enable you to reach your financial goals and implement plans.
Going over your budget is important as this enables you to determine what you should do next. If you know the amount you are spending and the money left in the bank, you will not make any hasty decision that can jeopardise your business. Reviewing your financial statement will give you an accurate picture of your financial health. You will also identify whether or not you should reassess your spending habits.
Hiring a bookkeeper can save you from any disaster that these risks may entail. Regardless of the size of your business, it pays off to talk to a professional who can help you put things in proper perspective. Avoiding these risks will also give you good night’s sleep knowing you have a reliable person to take care of the financial aspect of your business.