Bookkeeping for Small Business – Expert Guide

If you’re running a small business, having efficient and effective bookkeeping systems in place is crucial to giving your business the best chance at success. Regardless of whether your small business is in the start-up phase of launching or it has been trading for a while, knowing that your financial records are in order goes a long way towards freeing you up to focus on the goals of your business and helps 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? Who can they turn to for help? And how do they know that their bookkeeping service is doing a good job for them? Over the last two decades in business, and after providing expert bookkeeping services to thousands of small businesses, here at Darcy Bookkeeping & Business Services we have seen it all – the good, the bad and the ugly. Let’s take a quick dip into the world of small business bookkeeping and pick up some expert tips on effectively managing what can seem a very daunting task for many small business owners.

Small business bookkeeping - expert guide

Small Business Bookkeeping and Accounting Requirements

For Australian small businesses, there are several recording and reporting requirements that businesses are required to meet 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 and ensures that the lodgement of essential obligations such as tax returns and Business Activity Statements (BAS) are smooth and timely.

There are requirements for small business owners to maintain and keep records for a specified number of years; to report on profit and loss; lodge activity statements at regular intervals; lodge tax returns; report on payroll; withhold Goods and Services Tax (GST) and pass it onto the Australian Tax Office (ATO); withhold payroll tax and pass it onto the ATO; and withhold superannuation and submit it to the appropriate superannuation fund on behalf of employees. In addition to these fundamental requirements, there are a number of small business accounting requirements that are industry specific. Staying informed about these obligations is vital to ensure you meet the requirements of your industry and avoid penalties and legal issues.

One example of such additional requirements is that real estate agencies are also required to maintain trust accounts that are audited to ensure that client funds are appropriately managed. Another is that often in the construction industry, businesses are working with contractors, sub-contractors and employees, all of which vary with regards to how pay runs are processed and what entitlements businesses are required to meet. For example, superannuation and leave.

Having an expert bookkeeping service provider who is familiar with your industry is extremely beneficial in helping you remain compliant with reporting and knowing the nuances of your sector. A quality bookkeeping service for small business ought to keep you informed of your requirements and help with maintaining your systems in such a way that you can 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.

Cash vs Accrual Accounting

Deciding on whether to use cash accounting or accrual accounting methods can be a bit of a minefield for many small business owners. Having an expert small business bookkeeping service provider to advise and help navigate which option is best can be extremely advantageous.

In a nutshell, cash accounting is often used by small businesses to record transactions as money changes hands, making it rather straightforward for businesses with simple revenue and expenses and goods and services are paid for as provided. Accrual accounting, however, is often favoured by those businesses that extend credit terms to clients or who receive credit from suppliers and involves recording transactions as invoices and purchase orders are raised, giving a more comprehensive financial overview of the profitability of a business although it can be more time consuming and complex in implementing.

To better understand these methods and choose the right one for your business, refer to our comprehensive guide on the difference between cash and accrual accounting.


small business accounting


Essential Small Business Bookkeeping and Accounting Dates in Australia

There are a number of key dates that Australian small businesses need to be aware of in order to maintain compliance and avoid unnecessary stress. Meeting the deadlines for BAS lodgements, tax return submissions and financial year closures are critical and 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, but once a certain threshold of turnover is reached, this obligation becomes a monthly requirement. Quarterly BAS due dates are generally the 28th day of October, January, April and July, and monthly BAS due dates are around the 21st of each month for the previous month’s reporting. One of the benefits of using a bookkeeping service is that you have someone who is abreast of these dates and 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 and there are a number of reporting and lodgement deadlines tied to these dates. Individual Tax Returns must be lodged by 31 October if being lodged by yourself, however engaging an accountant to lodge for you allows for an extension on this date. The accountant, however, must be engaged by this date to ensure that you are not penalised for late lodgement. Business Tax Returns are due on the 15th of January for the previous financial year. In addition to these obligations, businesses are also required to report on the Pay As You Go (PAYG) tax withheld on behalf of employees by 14 July and provide a detailed summary by 14 August.

Ensuring that you have a clear grasp of these dates and aligning your bookkeeping efforts accordingly can save you from last-minute rushes and potential non-compliance issues.

Small Business Accounting Software

With a wide range of accounting software packages available for small businesses in Australia, 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 and advise as to what additional integrations may help with streamlining your processes and improving efficiencies in recording and reporting.

Some of the most commonly used software systems in Australia for small businesses are XeroMYOB, and QuickBooks Online due to their 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.

Xero for Small Business

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.

Being cloud-based, Xero allows for multi-use access meaning that it is easy to share your working file between your bookkeeper, accountant and yourself, allowing for seamless collaboration and real-time updates and advice. Xero is a subscription-based software package and they do have a number of different pricing options, based upon the needs of your business.

To explore the advantages of using Xero for small businesses, read our comprehensive guide on Xero’s key features.

MYOB for Small Business

MYOB is one of the most recognisable names in the accounting software world in Australia. MYOB accounting software provides a wide range of features within their suite of software options that lend to various 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, making working offline possible, although this 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 would require such as payroll processing, tax tracking, inventory, invoicing, bill management and customisable reports, making 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.

QuickBooks Online for Small Business

Another of the commonly used small business accounting software programs is QuickBooks Online. Quickbooks Online offers a wide range of features including invoicing, expense tracking and payroll management. It is cloud-based in nature, which 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 to may the monthly subscription fee. Having said that, Quickbooks online is generally more than able to service your business as it grows and 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 beilieve it to be in our list of the best accounting software for small business check out our article on QuickBooks software.

External Software Integrations

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 and reduce the double entering of certain information. For instance, rostering and payroll 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.


bookkeeping for small business


Advantages of Outsourcing Your Small Business Bookkeeping Tasks

As your small business grows, managing the bookkeeping needs of your business can become increasingly complex with payroll, inventory, rostering and reporting. Couple this with increased day-to-day business demands such as increased sales, managing staff and balancing marketing and advertising tasks, and many small businesses find their bookkeeping tasks slipping by the wayside and becoming overwhelming.

Outsourcing your bookkeeping tasks offers many benefits such as increased accuracy, access to professional expertise and time savings. You can focus on what you do best, whilst being assured that you are remaining compliant and up to date with reporting and lodgements by delegating these tasks to your bookkeeping service provider.

Outsourcing your bookkeeping also helps you to keep an objective perspective as to the financial health of your business, aiding you in focussing on strategic growth and management of your business. An external provider is often able to identify potential areas of improvement, provide insights on ways to reduce expenses and ensure that your financial records are up to date and accurate. 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, understanding the reporting and taxation obligations of your business and 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 from the get-go.

Key Points:

  • Compliance Matters: Ensure that your business is compliant with all bookkeeping and accounting regulations as per the Australian Taxation Office to ensure transparency and avoid penalties.
  • Method Matters: Choose cash or accrual accounting methods based on your business’s specific needs.
  • Dates Matter: Mark essential deadlines, including BAS lodgements and tax return submissions, and adhere to them in order to stay on track and avoid late fees.
  • Software Matters: select user-friendly accounting software like Xero, MYOB, or QuickBooks Online to streamline tasks based upon the needs of your business.
  • Outsourcing Matters: Consider outsourcing for accuracy and expert insights as your business grows.

Take Control of Your Small Business Bookkeeping!

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.