Bookkeeping Essentials For Dummies – Australia. Veechi Curtis

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Название Bookkeeping Essentials For Dummies – Australia
Автор произведения Veechi Curtis
Жанр Зарубежная образовательная литература
Серия For Dummies
Издательство Зарубежная образовательная литература
Год выпуска 0
isbn 9780730310662



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of your business. The process sounds simple — and indeed it is — and an hour or two spent customising your accounts is one of the most productive ways you can spend your time. I talk about accounts customisation in Chapter 3.

      With your accounts list looking spick and span, you’re ready to organise your paperwork and receipts and start entering transactions.

       Getting organised

      Accounting and bookkeeping involves so many different bills, receipts and statements that I used to think that when I finally left this world for a better place, I’d be buried under a mountain of paper. Fortunately, the paperless office is slowly becoming a reality, but this still doesn’t mean that you don’t need to be super organised about your business recordkeeping.

      What you want to create is a system that is efficient, but still meets taxation requirements in regards to recordkeeping. On the one hand, archiving invoices and receipts in electronic format can mean less handling of papers; on the other hand, you need to create a system where you can locate a receipt or invoice for every transaction for up to seven years after you lodge a tax return.

      

I provide lots of tips for getting your paperwork in order in Chapter 4. However, probably one of my biggest tips — and a tip that’s so important that I want to say it right at the beginning of this book — is to ensure that business and personal bank accounts are kept separate. Combining business and personal transactions in the one bank account wastes hours of bookkeeping time, causes confusion and can ultimately lead to mistakes. No matter how small the business, open a business bank account and devote this account to business transactions only.

       Keeping track of expenses and supplier bills

      In Chapter 5, I talk about tracking expenses, supplier bills and supplier payments. This work usually forms the guts of a bookkeeper’s daily or weekly tasks.

      I explain in Chapter 5 that the kind of bookkeeping processes you use for a micro business with no employees and not many sales is very different from the processes for a large business with lots of employees, complex inventory and multiple locations.

      For smaller businesses, the biggest single step you can take to make bookkeeping efficient is to enable bank feeds. Although bank feeds can’t automate transactions such as raising customer invoices, processing employee payroll or paying suppliers, the automatic import of transactions from your bank accounts makes recording expenses and reconciling bank accounts quick, easy and reliable. (Chapters 2 and 5 talk more about working with bank feeds.)

      With larger businesses, I recommend you focus on establishing a rhythm of what happens when. How often do you need to enter supplier invoices, pay bills or generate reports?

      My main tip for bookkeepers who are working with larger businesses is to set a schedule for bill payments, and then stick to it. For example, if you have weekly accounts, set one day per week where you settle these bills. If you have monthly accounts, set aside one day per month (usually a day that falls between the 20th and the last day of the month). Avoid paying bills in dribs and drabs, and invest time to negotiate payment terms with your suppliers, rather than cash on delivery.

       Recording money in

      Unless you’re also the business owner, most bookkeepers aren’t responsible for recording sales invoices — this task tends to fall to somebody else in the business. However, bookkeepers are responsible for recording customer payments, matching customer payments against invoices, and chasing customers for overdue amounts. I talk about this process in Chapter 6.

      In Chapter 6, I also explain how to allocate other kinds of deposits that don’t relate to invoices, such as owner contributions, refunds, proceeds from bank loans and so on. Bookkeepers often find these kinds of transactions quite tricky, and so I try to provide you with a reference of exactly how to allocate each kind of transaction.

Getting Technical

      If you’re new to business and bookkeeping, you will find there’s a heap to learn. When do you charge GST and when is something GST-free? How do know how much tax to deduct from an employee’s wages? And what is this arcane activity known as reconciling bank accounts?

       Understanding GST

      Registering for GST is optional if your turnover is less than $75,000 a year. If you think that your business, or the business that you’re working for, is going to exceed this annual turnover threshold and isn’t yet registered for GST, then I suggest you speak to the accountant quick smart.

      

Of course, complying with the law in terms of GST is much more involved than simply registering. You need to get down on scintillating topics such as what’s taxable, and what’s not; the key elements of a Tax Invoice; how often to submit GST reports and much more.

      If you’ve never done any bookkeeping before, probably my strongest word of advice is to force yourself to read all of Chapter 7 (the chapter in this book that deals with GST) from start to finish. Scarcely the most exciting way to spend a couple of hours, but I guarantee you that your time will not be wasted. In addition, do ask your accountant or a qualified bookkeeper to check your first couple of Business Activity Statements — this way, you can be sure your tax codes and systems are configured correctly, right from the start.

       Working with payroll

      Whether you’re a business owner doing your own books or a bookkeeper doing the books for someone else, bear in mind that as soon as a business takes on an employee, the real fun begins. Government paperwork starts pouring through the door like owl-delivered invitations to Harry Potter.

      As a bookkeeper or payroll officer, the scope of your job very much depends on the size of the business and how many employees there are. At its simplest, a bookkeeper’s role is sometimes to record a couple of pay transactions per week, maybe checking tax deductions or calculating monthly superannuation. But at its most complex, a payroll officer may be in charge of the payroll for a couple of hundred employees, and have to be familiar with minimum pay rates, convoluted leave calculations, termination pay and much more.

      If you’re new to bookkeeping, you may find things such as PAYG tax, superannuation and workers compensation to be quite daunting. Take heart — in Chapter 8, I try to provide you with a step-by-step reference for everything you need to know in order to process your first pay.

      

My main tip for payroll is to be vigilant about reporting deadlines. Lodging forms and making payments for things such as PAYG tax and superannuation is a serious business — after all, you’re acting as a kind of caretaker for your employees’ funds — and the penalties for late lodgement or payment can be quite punitive. Not only that, but if you fall into a habit of lagging behind with paying these liabilities, you can quickly end up with cashflow difficulties.

       Reconcile often, reconcile well

      Reconciling bank accounts is one of the core tasks for any bookkeeper (and a process that I talk about in much more detail in Chapter 9). Put simply, a bank reconciliation is when you match everything that’s on your bank statement against