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If you’re running a small business, having efficient and effective bookkeeping systems in place is crucial to your success. It can help free you up to focus on the goals of your business. This, in turn allows you to make informed decisions that can impact your bottom line in the longer term. So, what do small businesses need to know about bookkeeping? Over the last two decades of helping small businesses with their bookkeeping, we have seen it all. Let’s take a quick dip into the world of small business bookkeeping and learn to manage your effectively bookkeeping.
First off, does your company count as a small business? If you If you are running a small business (as an individual, partnership, company or trust) and you have an aggregated turnover of under $10 million, then the ATO says that you are. You’re ready to dive in to the world of small business bookkeeping.
Darcy Bookkeeping can help support the bookkeeping needs of businesses of all sizes. Give us a call on 1300 728 875 or get in touch to get started.
Australian businesses must meet several recording and reporting requirements in order to remain compliant with Government regulations and for financial transparency. Keeping your financial records in order is essential for meeting these bookkeeping and accounting requirements. It also ensures that the lodgement of essential obligations such as tax returns and Business Activity Statements (BAS) are smooth and timely.
Small business owners have a number of bookkeeping-related requirements, including:
In addition to these fundamental requirements, there are a number of industry-specific small business accounting requirements. For example, real estate agencies are required to maintain trust accounts. These are audited to ensure that client funds are appropriately managed. In the construction industry, to give another example, businesses must adhere to different payroll- and benefits-related regulations depending on whether they’re dealing with contractors, sub-contractors or employees. Staying informed about these obligations helps you meet industry requirements and avoid penalties and legal issues.
How can you find out what requirements apply to you? We recommend engaging an expert bookkeeping service provider who is familiar with your industry. They can help you remain compliant with reporting and navigate the nuances of your sector. A quality bookkeeping service for small business will also help maintain your systems to ensure you remain in the loop and don’t get caught out with changes in legislation or industry standards.
Darcy Bookkeeping & Business Services has been providing expert bookkeeping services to Australian small businesses for over 10 years. If you’d like help to get your accounting and bookkeeping systems setup, give us a call on 1300 728 875 or send us a message.
Should you use cash accounting or accrual accounting? This question can be a bit of a minefield for many small business owners. If you’re not sure, your best bet is to have an expert small business bookkeeping service provider advise you. This means you’ll end up with the right system from the outset without getting bogged down with the details.
In a nutshell, small businesses will often choose cash accounting to record transactions as money changes hands. This makes it rather straightforward for businesses with simple revenue and expenses. It helps to ensure that goods and services are paid for as provided. On the other hand, a business may opt for accrual accounting if they extend credit terms to clients or receive credit from suppliers. It involves recording transactions as invoices and raising purchase orders. This gives a more comprehensive financial overview of the profitability of a business. This can be more time consuming and complex in implementing.
Want to learn more about accrual vs cash accounting? Please refer to our comprehensive guide on the difference between cash and accrual accounting.
Australian small businesses need to be aware of a number of key dates in order to maintain compliance and avoid unnecessary stress. These include:
Failure to meet reporting obligations by the due date can result in financial setbacks and penalties.
BAS lodgements must be made quarterly for most clients. However, once a certain threshold of turnover is reached, this obligation becomes a monthly requirement.
One of the benefits of using a bookkeeping service is that you have someone who is abreast of these dates. Additionally, you usually also get an extension, pushing these dates out by up to four weeks.
In Australia, the financial year runs from 1 July to 30 June. There are a number of reporting and lodgement deadlines tied to these dates.
Want to avoid last-minute rushes and potential non-compliance issues? Ensure that you have a clear grasp of these dates and align your bookkeeping efforts accordingly.
There is wide range of accounting software packages available for small businesses in Australia. For the uninitiated, it can be overwhelming and difficult to know which one to choose. Selecting the best accounting software for sole-traders and small businesses can make the world of difference in simplifying your bookkeeping processes and maximising the benefits to your small business. An expert small business bookkeeper will be able to guide you in your selection. They can also advise as to what additional integrations may help with streamlining your processes. This will improve efficiencies in recording and reporting.
Some of the most commonly used software systems in Australia for small businesses are Xero, MYOB, and QuickBooks Online. They all have user-friendly interfaces, comprehensive features and subscription-based investment. For more information on how to choose the best software for your unique business needs, take a look at our guide to accounting software for Australian businesses.
One of the most popular cloud-based accounting software programs in Australia is Xero. Xero is fairly simple to use and provides a range of features that streamline your bookkeeping tasks and make invoicing, bank reconciliation and expense monitoring simple and efficient.
Because it is cloud-based, Xero allows for multi-use access. This means that it is easy to share your working file between your bookkeeper, accountant and yourself. This allows for seamless collaboration and real-time updates and advice. Xero is a subscription-based software package with a number of different pricing options. You can customise the level of service based upon the needs of your business.
To explore the advantages of using Xero for small businesses, read our comprehensive guide to Xero’s key features.
MYOB is one of the most recognisable names in the Australian accounting software world. This accounting software provides a wide range of features to suit different business types. From basic small business bookkeeping needs to advanced inventory management, MYOB caters to the diverse needs of small businesses in Australia.
Whilst Xero is purely cloud-based, MYOB also has desktop and hybrid capabilities. This allows you to work offline, which some businesses may prefer. However, it can reduce the ability to share in real-time and can make collaboration a little less streamlined.
MYOB has all the features that a small business might require. This includes
These features make it one of the more popular software programs for business. Learn more about its features and benefits in our detailed article on MYOB’s relevance for small businesses.
Another popular small business accounting software program is QuickBooks Online. QuickBooks Online offers a wide range of features, including:
Like Xero, QuickBooks Online is cloud-based. This benefits those with multiple users, remote teams or multiple locations.
The pricing of QuickBooks Online is more attractive for many small business owners, with a lower monthly fee at the entry point. However, as the needs of the business grow, so too does the monthly subscription fee. Having said that, QuickBooks Online is generally more than able to service your business as it grows. The integration capabilities also add to the benefits of using QuickBooks Online for your small business.
For a more detailed overview of QuickBooks Online and to see why we believe it to be in our list of the best accounting software for small business, check out our article on QuickBooks software.
Many Australian small businesses are now also looking to integrate Point Of Sale (POS) systems, rostering and inventory software with their accounting software. Doing so can reduce the man-hours required with keeping track of where your money is being spent. It can also reduce the double entering of certain information. For instance, there are rostering and payroll systems that integrate timesheets and make weekly or fortnightly pay runs much more efficient and cost-effective.
An expert small business bookkeeping service provider can assist with setting up your integrative accounting software packages and train you in how to maximise the benefits for your business. They will be able to advise as to what software programs would suit your business and how they can save you time and money in the long run.
As your small business grows, managing the bookkeeping needs of your business can become increasingly complex. You will have to contend with things like payroll, inventory, rostering and reporting. You will also have increased day-to-day business demands such as increased sales, managing staff and balancing marketing and advertising tasks. Many small businesses find their bookkeeping tasks slipping by the wayside and becoming overwhelming.
Outsourcing your bookkeeping tasks offers many benefits. These include:
You can focus on what you do best by delegating these tasks to your bookkeeping service provider. This way, you can rest assured that you are remaining compliant and up to date with reporting and lodgements.
Outsourcing your bookkeeping also helps you to keep an objective perspective as to the financial health of your business. This will help you focus on strategic growth and management of your business.
An external provider is often able to:
This is invaluable both when it comes to making key financial decisions and also when seeking additional funding from lenders and/or investors.
Having sound bookkeeping practices in place is vital to ensuring the success of your business in today’s competitive market. From selecting and setting up your accounting software to understanding the reporting and taxation obligations of your business to considering outsourcing your bookkeeping tasks, every decision you make in small business influences the financial health and the longevity of your business. Set your business up for success from the outset by adopting effective and efficient bookkeeping strategies now.
Ensure the success of your business and get your bookkeeping needs sorted from the start. We offer flexible options to suit small businesses – both hourly rates and fixed-fee monthly packages. Give us a call on 1300 728 875 or send us a message to see how we can help your business succeed.
