Owning a small business on the Gold Coast is always exciting. It’s an uphill battle most days, but owning and operating your own venture creates a great sense of pride and purpose. While the sense of accomplishment is running high, many people that open businesses tend to overlook certain aspects of the operation. One such area that isn’t very glamorous is the bookkeeping that needs to be taken seriously.
Bookkeeping is not very exciting. However, keeping a proper set of books for your business is essential to the health of your business. In this article we’ll take a look at some of the reasons why you need to focus on bookkeeping for your business and some helpful information to ensure you stay on top of the bookkeeping.
Reasons Why It’s Important
There’s no question that bookkeeping is important. But what are some ways that bookkeeping keeps your business in line?
Track Cash Flow: Money in and money out of your business can be difficult to see if you aren’t keeping your books correctly. If you have a good bookkeeping system in place, you’ll be able to see right away where your money is coming from, which enables you to plan effectively in terms of maximizing income, and decreasing expenses, to ensure money is continuously coming in.
See Your Business’ Profitability: Making your business profitable is the name of the game. No matter the kind of business you are running, it’s essential that you keep your finances in the black in the long run in order to keep the doors open. If you aren’t keeping an accurate set of books, you’ll have a difficult time seeing how profitable your business truly is. You could be selling like crazy, but if your expenses are just as high or higher you may wind up in the red before too long. By establishing a proper bookkeeping regimen, you’ll get an accurate picture of your profit margins.
See What Needs Fixing: Updating your business model is a difficult step to take for any owner, but sometimes changes need to be made. Making that change at the right time is important to the health of your business as well. The only way you’ll be able to make a sound decision about making a change is by going through your books and seeing if you’re financially ready to shift your model. With proper bookkeeping, you’ll know right away if the time is right.
Meet Your Tax Obligations: As a business owner, you need to meet your BAS and quarterly period requirements. The ATO is not above shutting down a business due to tax issues, so you will want to make sure you have your books well taken care of in order to avoid any tax issues.
Complete Business Overview: The most important reason to keep a clean set of books for your business is so that you have a really great sense of how the business is doing overall. If a change is needed, your accounts will let you know. If you are being audited, a well kept set of books will make the process much easier for all parties involved.
Tips to Stay Ahead
Whether you are a new business owner, or you have owned businesses for years, it’s always important to stay ahead of the curve when it comes to keeping your books. Here are some tips that will help you keep you with your bookkeeping services duties.
Make it a Habit: Like any business, there should be a system of operations in place to make things go much smoother. Schedule bookkeeping into your weekly routine as soon as you can. By making it a habit, a boring but important task will be completed and you’ll avoid future headaches.
Use a Receivables and Payables System: Money will come in and go out of your business, and keeping track of who has paid – and who needs to pay – will go a long way toward keeping your books in good condition. Your future self will thank you no matter what kind of system you use to track your receivables and payables. Keeping a record of your receivables and payables will also make your life much easier when tax time comes around or if you need to apply for a loan.
Keep Track of Cash Expenses: Today’s accounting software makes the tracking of credit card and electronic expenses very easy. Unfortunately, for that reason cash expenses can sometimes be overlooked. Make sure that you are staying on top of your cash expenses as well as your other expenses. All of these things eat into your bottom line, so you will want to remain vigilant regarding any expenses that your business incurs.
The most important tip to keeping your books in good order is to use a professional. Darcy Services offers Gold Coast business owners a valuable bookkeeping resource. Whether you need help with you BAS preparations, quarterly bookkeeping, or simply need an expert in accounting software, Darcy Bookkeeping services can be your guide each step of the way. Call us today!