Bookkeeping Tips for Small Business

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If you’re a small business owner who’s just starting out, there are a million and one things you need to be across. While it can be tempting to see administrative functions like bookkeeping as something that can be put off, it can lead to costly and time-consuming situations. 

To help you ensure that your business is in top financial form, we’ve put together this short list of tips for small business owners. Stay on top of your books and your business with the help of MP Bookkeepers. 

  1. Know the law 

First things first, understand what you’re required to do. Your bookkeeping requirements are determined by a range of factors including what industry your business operates in, where it’s based, how many people it employs and what kind of employment agreements it’s party to. Even if you’re intent on doing your books yourself, taking the time to work with a professional to gain an overview of your responsibilities under payroll legislation. 

  1. Keep your documents in order 

Having a complete paper trail of payments made by and to your business is absolutely essential. Not only does it provide crucial data to help inform business decisions – are we overspending on a certain service, do we need to change product suppliers, do we need more staff, etc – it also helps protect you against legal repercussions. It’s not something business owners like to think about, but should you ever be audited by the Australian Taxation Office it’s vital that you be able to account for every transaction and every dollar spent and received. 

  1. Be proactive about putting aside money for taxes

Similarly, you’d be making a mistake not to be constantly preparing for your annual tax return. Always ensuring that you’re allocating the correct percentage of each dollar spent to a separate tax account is absolutely vital. If you are required to pay taxes quarterly, make sure you have a healthy amount in your bank account for when that activity statement or instalment notice arrives. 

  1. Make time every day for your finances 

Bookkeeping isn’t something that can be done all at once. Good record-keeping practice – which is the majority of bookkeeping – requires constant, diligent attention, so ensure that you’re making it part of your daily practices. Checking deposits every day and carefully documenting each transaction is key to a smooth time at end of financial year. If your company is growing, stress the importance to new hires of proper reporting as part of workflows. 

  1. Budget for major expenses 

When it does come time to buy that new piece of plant or equipment, or to locate to a new and more spacious office, you want to know that you can do it without hurting your bottom line. This takes planning and forethought – every major purchase must be thoroughly costed as part of the decision process and an achievable timeframe set. As part of this process, you’ll be able to figure out how much of your weekly revenue needs to be diverted to this particular purchase. 

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