Whether you like it or not, bookkeeping is an essential part of your business. A successful business requires records in good shape which is achieved only through regular monitoring. Handling your money can help you to make and keep long-term goals, preventing any unpleasant surprises and improving your profits. Here are some tips for bookkeeping in case you choose to do it yourself.
One of the most important things is to get accounting software which will suit your business requirements. If you are not sure which one to pick, you can contact an accountant or business consultant to advise you which one would be the best solution for your business needs.
Once you have your system sorted, try and process your records daily or weekly as regular reviews will allow you to control your cash flow. Consistency is also very important as heading your columns the same way will save you a lot of your precious time.
Open a business account for business earnings and expenses. You need to make sure that you separate your business transactions from the personal ones.
It is recommendable that you deposit all your cash the same day you receive it which will ensure that all your income is recorded properly. You need to know which deposits are exact incomes; otherwise, you may pay taxes on deposits such as loans or cash infusions from your personal accounts. And, of course, you do not want that to happen.
You should determine your expense categories by looking at tax returns and include them all in your accounting system. Also, make sure that you track all your expenses. If some of them are not justified as business related activities, you may miss some tax write-offs. And, as the ATO requires, you should keep your records for a minimum of five years.
Plan all your major expenses, such as upgrading computers at least a year ahead. You do not want to take money out of the company when you are short in the slower months.
Once you expand your business, you should start thinking of hiring a professional bookkeeper who will take care of your records while you can stay focused on growing your business.