The new financial year is always the best time to get your finances and bookkeeping in order. In this article, we explain what bookkeeping things you need to consider for the new financial year.
1. Ditch The Spreadsheets And Get The Right Bookkeeping App
One of the main reasons some businesses fail is because they don’t have a good bookkeeping system. With the right bookkeeping, you’ll receive enough warning if it looks like your business might run out of cash.
Using the latest bookkeeping software is the most efficient choice. The most popular bookkeeping apps include Xero, MYOB and Quickbooks, which you can trial each one for free and see what works better for you.
The new financial year is the perfect time to switch to a bookkeeping app so by the time this financial year is over, you’ll have a full financial year worth of data.
2. Make Sure Your GST And Other Registrations Are In Order
The new financial year is a good time to assess if you need to register for GST.
You must register for GST if:
- Your business has a GST turnover of $75,000 or more
- You provide taxi or limousine travel (including ride-sourcing services like Uber, GoCatch, Didi or OLA) regardless of your GST turnover
- You want to claim fuel tax credits for your business, regardless of your GST turnover
Other registrations you may need include:
- Tax File Number (if you’re operating as a partnership, trust or company) – required
- Australian business number (ABN) – recommended
- Pay as you go (PAYG) withholding – required if you employ staff
- Payroll tax – required in certain circumstances
- Fringe benefits tax (FBT) – required in certain circumstances
3. Get Your Bookkeeping Processes In Order
Do your bookkeeping weekly no matter how busy you are. If you genuinely cannot keep up, you are far better off to outsource the bookkeeping to a professional to keep on top of.
Regular bookkeeping means that your BAS preparation and lodgment will be much easier to keep on top of too. Make note of the BAS lodgment and payment due dates and pop these into your calendar so you won’t forget to lodge on time: https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/Due-dates-for-lodging-and-paying-your-BAS/
Your financial reports are only useful if your bookkeeping is up to date and accurate, so don’t let this get out of hand. Make sure your bookkeeping is done weekly (minimum) so you can see the financial state of your business at a glance.
4. Review Your Financial Reports Regularly
It’s important to keep a close eye on your business performance. Good accounting software will let you quickly generate useful reports, such as:
- Profit and Loss Reports – these show your company’s income, expenses and profits over time.
- Balance Sheet Reports – these show assets, liabilities and equity
- Accounts Payable and Accounts Receivable Reports – these show how much money is owed by, and to, your company.
5. Keep Your Business And Your Personal Finances Separate
This is essential if you want to understand your business cash flow and forecast how it might change. Mixing your business and personal finances can leave you uncertain about business performance. If you continue to combine your personal and business transactions, you’ll end up doing unnecessary bookkeeping for your personal transactions, as these still need to be processed in order to balance your bank account at month-end.
6. Get Your Cash Flow In Order And Build A Cash Reserve
Access to cash will make or break your business. The ultimate step to managing cash flow like a pro is to build a cash reserve. A cash reserve provides the cushion you need to manage unexpected events. It also gives you the confidence and finances you need to grow your business. It’s not always possible to build a large cash reserve. But if you do, it can insulate you from the economic cycle and the whims of banks and other lenders. It will also let you take advantage of opportunities when they present themselves.
7. Get Professional Help
Doing bookkeeping and payroll to the level required these days can be complicated and time-consuming. Plus there are a lot of legal requirements, which means there are serious risks to getting things wrong. For these reasons, many business owners prefer to leave it to the experts. It can free up their time and give them extra peace of mind.
In addition, professional bookkeeping services providers are often able to do your bookkeeping at a lower cost than you may realise, as they use software to automate many of the tasks involved.
Expert bookkeeping and payroll services are worth their weight in gold. When you find the right outsourced bookkeeping and payroll service, you’ll spend less time thinking about your bookkeeping and more time doing what you do best – running and growing your business!
Maree’s Mobile Bookkeeping provides a complete Bookkeeping, BAS Lodgement and Payroll Service for small business owners. As we work virtually, we service business owners from anywhere in Australia. From bookkeeping services through to payroll services, we’re here to help you take control of your bookkeeping and compliance functions so that you can focus on growing your business.
To find out more about how a professional bookkeeping service can save you time and money, phone Maree today on 0429 363 047.
Maree Punzet | Maree’s Mobile Bookkeeping | 0429 363 047
You didn’t go into business to do your Payroll and Bookkeeping, BUT WE DID