Bookkeeping for small business
Bookkeeping is the process of recording and summarising the financial transactions of a business. It is used to keep track of business finances and make sure that they are accurate.
Small businesses should use a bookkeeper to avoid making mistakes when doing their bookkeeping.
Bookkeepers can take care of the paperwork, file taxes, and stay on top of deadlines!
In addition, bookkeeping is a vital part of running a business. It helps you keep track of all your financial transactions so that you can make sure that you are meeting your tax obligations and managing your money effectively. Further, small businesses should use bookkeeping services because it saves them time and money in the long run.
Why should you keep records?
Business entities need to keep records of all invoices and receipts that exceed $82.5 including GST for tax purposes.
Records are important for many reasons. They help to keep track of the money that is coming in and out of the company, they can be used to prove that the company has done what it said it would do, and they can also be used to show how much profit a company has made.
Keeping records is not just about proving that you are being honest with your customers, but it also helps you to see where your business is going, what needs to be improved, and how much more work you need to do.
What is the record-keeping requirement for small businesses?
Keeping records helps to track income and expenses, manage taxes, and provide financial statements for banks or investors. Hence, the requirements must be strictly followed.
Australian taxation office says, “By law, your records must:
- explain all transactions
- be in writing (electronic or paper)
- be in English or in a form that can be easily converted
- be kept for five years (some records may need to be kept longer).
If you don’t keep the right tax records, you can incur penalties.”
How to keep records for a small business?
Keeping records for a small business is not an easy task. It involves a lot of rules and regulations.
This is what the Australian taxation office says:
“You can keep invoicing, payment and other business transaction record electronically or on paper. The principles are the same for each, but keeping electronic records will make some tasks easier.
With the right electronic record-keeping software you can:
- automatically tally amounts and provide ready-made reports
- produce invoices, summaries and reports for GST and income tax purposes
- keep up with the latest tax rates, tax laws and rulings
- report certain information to us online
- save on physical storage space
- back up records in case of flood, fire or theft.
If you intend to use a bookkeeper or accountant, get their advice about the best system for you – choose a system you can understand and operate easily.”
Luckily, there are plenty of resources available to keep records for a small business and to track information. All these requirements can be easily met by using bookkeeping software. Such software have come a long way in terms of accuracy and speed in recent years. With their help, bookkeeping can now be done faster and with more accuracy than before.
Interestingly, free and chargeable software are available for offline or online bookkeeping. Start-up businesses can benefit from free software that does not require a lot of detailed reports and payroll. Examples are:
ZOHO Books
Zoho Books is a free software that provides bookkeeping, invoicing, and time tracking. It is a cloud-based accounting software for small business owners, entrepreneurs, and freelancers.
Zoho Books offers a complete suite of tools to manage the financial aspects of your business. With Zoho Books, you can track expenses and profits in real-time. You can also generate professional reports to help you analyze your finances and make better decisions for your business.
ZIPBooks
ZIPBooks is a new software that helps you keep track of your finances and bookkeeping. It provides you with a clear overview of your business finances, without the need for any accounting knowledge.
The software is very easy to use and it has an intuitive interface. All you have to do is enter your transactions and the software will automatically categorise them for you. You can also change the currency if needed, which makes it easier for international businesses.
ZIPBooks offers an unlimited amount of free users, but there are different packages available for purchase, depending on what features you need from the software.
Chargeable software are more sophisticated and have more features than free software. Some of the chargeable bookkeeping software are:
Xero
Xero bookkeeper is cloud-based accounting software that is designed to help small businesses manage their finances.
The main goal of Xero is to make accounting and bookkeeping as straightforward as possible, which is why it has been designed with an intuitive user interface.
Xero’s features include invoicing, expenses, bank feeds, multi-currency support and exports.
Accountants can also use Xero to audit their books. It’s also worth noting that there are no set-up fees or hidden charges – all you need to do is sign up and start using it!
Furthermore, the Hubdoc plugin for Xero allows you to keep all your receipts in different folders, code them, and send them to Xero for free. With Hubdoc’s easy-to-use interface you can snap and send receipts from your phone, upload from your desktop or simply forward invoices from your inbox.
Make sure to also check out our Xero Bookkeeping Guide for Beginners to find out why you need bookkeeping.
Quickbooks Online
QuickBooks Online is cloud-based accounting software that helps small businesses stay on top of their finances.
It provides the tools to manage your business, including invoicing, payments, payroll and more. QuickBooks Online also offers additional features like the point of sale (POS) and inventory management.
With QuickBooks Online, you can access your information from anywhere with an internet connection. You can also access it on the go with the mobile app.
FreshBooks
FreshBooks is easy-to-use accounting software that does all the heavy lifting for small businesses so they can focus on what matters most – running their business.
FreshBooks has over 2 million users and is available in 190 countries. It can be used as a standalone tool or integrated with other tools like QuickBooks, Xero, and Salesforce.
How a bookkeeper can help?
A bookkeeper can help you by reconciling your transactions. This saves you the time and money of doing it yourself, and they do it accurately.
They are knowledgeable about software and are able to find any errors or discrepancies that may be present in your accounting. They also provide timely reporting in order to help you stay on top of your finances better.
Bookkeepers can also help with business planning, managing cash flow, creating budgets and implementing them, and they can offer advice on how to grow your business through smart financial decisions.
Bookkeepers can also help with your BAS needs
The BAS lodgement is a tax form that records the amount GST paid or received for goods or services. The BAS form is completed by the business and lodged with the Australian Taxation Office (ATO) to record transactions. The frequency of this is determined by business revenue and can be done monthly, quarterly, or annually.
We understand that bookkeeping can be overwhelming for small business owners. Hence, we are here to help!
Books and Balance bookkeeping services can provide a range of services including:
· Business bookkeeping
· Payroll management
· BAS lodgement
· Bookkeeping clean-up
· Software solutions
· Point of sale system
· Financial analysis
· Accounts payable
· Individual tax returns
Please feel free to contact us below for more information. We will be glad to assist you with your small business bookkeeping needs.
