You’ve gone into Business for yourself for any number of reasons. Maybe, you want to work for yourself for the flexibility, need to create your own career opportunity, or hate your day job. Part of the deal is looking after the paperwork, a large part of which is the accounts. I’ve seen many small business owner’s who are busy with their business, but have run into trouble with the Tax office, or the banks when going for funding to grow their business because their accounting system isn’t organised. So what could they have done and what can you do to help keep your books organised.
- Open a Bank Account
I know you already have one (it’s probably in your own name though). Open one just in the business name. While you’re at it open one for savings for the GST, Tax and employee’s superannuation). Having multiple business bank accounts is cost effective as the bank fees for these type of accounts can be very low. It’s also so much easier than trying to separate out private and business expenses from the one bank account – cheaper come tax time too.
- Don’t use Cash – for paying bills
It can be tricky and time consuming to track expenses paid for with cash. When there’s been no other option (like paying for a surprise client coffee) it’s best to reimburse yourself using an Expense claim form. You will record both the transaction and GST correctly. Most importantly it will help prevent cash transactions eating into your revenue.
- Get Organised – Digitally
Say goodbye to manual filing of receipts, invoices and other financial paperwork by using one of the many inexpensive electronic capture and storage systems available today. Schedule time weekly to catchup on your financial admin to keep on top of it.
- Monitor and Record Accounts Receivable & Bills Payable
Clients paying their bills is a vital part of keeping your business going – after all Cashflow is king! Keep track of payments and follow-up quickly outstanding debts. Find a system and use it. It’s also important to use a system to monitor the Bills you have, ensuring you don’t double up on payments or be late paying your suppliers.
- Choose some Software
Use software to regularly reconcile your accounts . Cloud based software allows collaboration with your advisors when you want it. We love Xero, but have clients who also use Quickbooks online and MYOB Essentials. These systems are easy to use and the time they save makes the subscription very good value. Our advice is to have the system set up properly in the first place. Training will also allow you to get the most of the system you choose.
Keep your accounts organised, it will save you time and will allow you to know what is going on in your business, meaning less stress and better decision making.