Bookkeeping Guidance for Small Businesses

As the end of October draws near, lots of people with small businesses start to panic about their tax returns, which may have largely been forgotten about but due on the thirty first. On the one side the Government is telling them that they can fill the returns in themselves, without any outside assistance, which is true, you can. Generally, the Government is very happy if you do, because you are quite possibly going to end up paying too much tax to them by not claiming all of your entitlements. Albeit, hiring a tax accountant will incur additional costs. This should not dishearten you as this will prevent you from committing mistakes that could cost you more money. Still, if you want to do a few things yourself, it is a good idea to make sure that your bookkeeping strategies and methods are exemplary. 

Good Bookkeeping Ideas 

One of the most important things to do throughout the year is that you are keeping all of your records properly organised, including every revenue stream and receipt for every company purchase, ensuring that your personal financials are kept totally separate from the business. This means you really need to open a separate bank account for the company, because not doing so is going to create a headache come October, either for you or for the accountant if you use one. Bookkeeping can be very time consuming, especially if you are keeping paper records, so moving to digital for your payroll, ledger and cashbook can save you a lot of time in entering the data. A lot of business owners fall into the trap of not having their finger totally on the pulse of how their business is doing financially, until they find themselves with no money and a big pile of nasty debts. A monthly report on your income statement and balance sheet can help you avoid this particular scenario, as long of course as you understand what the reports mean. 

Keep It Accurate 

As many Sydney bookkeeping services for small business can tell you, it is essential that you ensure that your accounts are perfectly reconciled, and to do so regularly. If there is a discrepancy, however small, you cannot ignore it because it will not get better on its own, and if your books don’t line up, all of your financial statements will be inaccurate. Keeping an accurate track of what you use for work is also important. If you use your phone for social and business, keep the logs so that you can claim a percentage of the bills back, and the same thing if you are using your personal vehicle for work, keep a log of the mileage which will also reduce your tax bill. 

Better Bookkeeping

Create a budget for everything to do with your company, from office supplies, inventory, insurance and maintenance, right through to your tax bill itself. If you are thinking ahead, you will always have the finance for everything your company needs, and finding the money for the tax bill will not be an issue, if you have been laying it to one side monthly, based on revenue, will mean you don’t have to panic when the tax bill is due.

I hope you enjoyed this article about bookkeeping and accounting guidance for small businesses or startups.

Interested in more articles about frugal finance?

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