Bookkeeping Basics for Small Business

As a business, tax season is virtually all year round. For a small business, tax and accounting is also an important part of day-to-day operations. From employee salaries, staff superannuation, product manufacturing, business purchases and expenses, understanding your business’s finances is essential.

Making sure you’re on top of your bookkeeping (that is without an accountant) is crucial for your business’s longevity and financial success.

ABA Tax has an incredibly talented and experienced bookkeeping expert – not trying to brag 😉.

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Here are Angela’s top FIVE tips for small business’s trying to organise their finances and stay on top the game:

  • Set aside funds to pay tax and or employee superannuation. Open a separate bank account and regularly transfer funds from the business account. Saving for these inevitable payments assists with cash flow when these statutory payments become due.
  • Schedule time each week to work on your books and stay as current as possible. It may be tempting to skip this ever so often, but when you stick to the schedule it will be so much easier to stay on top of the finances without adding to one’s stress. Come #taxtime you will reap the rewards for being consistent, trust us.
  • Record and reconcile your transactions daily (or as frequent as you can). The bank reconciliation process involves matching the balance in your books to that of the bank statement. Bank reconciliations are important because if there is a discrepancy, you need to find the cause and make an adjustment so that your financial statements and business activity statements (BAS) are accurate. This will save you time, money and energy when these reports are required from you.
  • We’re big on organisation at ABA Tax. Therefore, we encourage all our small business clients to have organised bank accounts. As a business owner its important to have two separate bank accounts – one for your business and the other for your personal expenses. It is advisable to open your personal account with a different bank so that you won’t be tempted to transfer funds from the business account or vice versa. This will make it much easier to track business cash flow and ensure accurate recording of your business transactions.
  • Invest in efficient accounting software! This simply makes your life easier. Programs like Xero, QuickBooks and MYOB help you automate your finances, track your income and expenses and ultimately make it time manageable for you as the busy business owner.

It’s important to remember that managing your own bookkeeping is about consistency and attention to detail. From reconciling your bank statements, lodging your BAS, learning how to use Xero… it may seem like a lot however with good time management and organisation, it can be a seamless process.

Don’t forget to contact our team for any questions, call us at 1300 797 175 or send us an email at info@abatax.com.au.

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