The typical entrepreneur is so deeply engrossed on the day-to-day running of the business that they barely have the time to think about business systems. These are often treated as an afterthought until the entrepreneur comes face to face with calamity and then they have to embark on a crash program to implement new systems that will streamline business and add greater efficiency in its operations.
One of the key business systems that is often overlooked is bookkeeping. For most entrepreneurs, it isn’t really a priority until it is tax time. But good bookkeeping has its advantages and when done well, it will give you a better handle of your money.
Making sense of your money not only helps you plan long term; it will also help you handle the occasional ups and downs in your business cash flow. Most importantly, good bookkeeping will help you stay in the good books with the Australian Taxation Office and avoid excess taxes and penalties while taking advantage of any tax deductions. Here are some of the best bookkeeping habits that every entrepreneur needs to adopt to stay on top of their money game:-
Invest in good accounting software
For most modern businesses, this is a no-brainer. Invest in the right accounting software for your business right from the beginning. Not only does this help you streamline the bookkeeping process, you can also use your accounting software to efficiently create, track and manage your expenses all by yourself.
The problem is that there are so many accounting software tools out there and if you are unfamiliar with the terrain, choosing the right one can be a daunting task. If you already have an accountant Melbourne professional doing your books, ask them for recommendations on the best bookkeeping software that will meet your unique business requirements.
Some of the popular accounting software for Australian businesses include Sage One, MYOB Essentials, Xero, Reckon One, Saasu and Intuit. Each of these accounting software tools comes with its own sets of differentiating features. For example, some are simple and easy to use while others are more robust. Some have invested in mobile and cloud accounting technology that extends their functions to new environments. With a mobile accounting app, for example, you can manage your bookkeeping needs on the go.
To pick the right accounting solution for your business, talk to an accounting firm Melbourne professional for suggestions or read reviews and testimonials online to determine the kind of applications that will be a right fit for you.
The bottom line is that the right bookkeeping software will keep you a step ahead of your finances, enabling you to manage your accounting needs faster and more efficiently.
Safely Keep all Your Receipts and Invoices
It is good to have a system for the safe handling and storage of all the invoices and receipts so as to keep track all of your business expenses. This is especially required if you are handling a cash-heavy business because cash transactions are generally much harder to track. If you can keep all the receipts and invoices, it will be possible to track all your expenses down to the last dollar.
The process of tracking receipts and invoices will be much easier if you have invested in proper accounting software for your business. An entrepreneur mostly lives a pressure-cooker lifestyle where they are constantly on the move so it may be convenient to invest in a mobile or cloud accounting software tool that can be regularly updated on the go. This will also eliminate the need to keep volumes of paper trail.
Keep track of all your invoices
Issuing invoices is just the easy part. The most critical part is ensuring that all your invoices are paid on time. Without a proper system of tracking all invoices, a lot of your outstanding payments will slip through the cracks. Many suppliers will only pay upon reminders.
You’ll probably need a super-human memory to remember all the invoices that you have issued in the past few weeks or months. A more prudent approach would be to automate this process via accounting software with invoice tracking and automatic payment reminders. An invoicing software tool ensures that you leave no money on the table.
Some accounting software tools have robust invoicing functionality that show the invoices sent, invoices received, the invoices paid, late invoices and outstanding invoices.
Update your books on a regular basis
Updating your books on a regularly basis should be a habit. If you are waking up everyday to run a business, your business bottom-line should be uppermost on your mind. This will prompt you to update your books regularly so you have an idea on where you stand financially.
There is another incentive for keeping your books updated on a regular basis: it minimizes accounting errors. If you can keep the routine, try to update the books daily or at least weekly so as to capture every small revenue or expense flowing into or out of the business. If you are constantly in touch with your books, you can have a crystal clear insight into how your business is performing at any one point.
Hire a Professional Accountant
In case you are too busy to look after your books, it is advisable to hire a professional accountant Melbourne expert who will take care of your bookkeeping needs.
Besides, bookkeeping is generally a fairly complicated process and if you don’t have the expertise, you are likely to make costly errors that will cut into your margins. A competent and professional accountant Melbourne can inject the much needed prudence in the management of your financial affairs. If you are too busy with the operational aspects of your business, they will also save you a lot of time by taking care of a rather tedious and time-consuming task.