Bookkeeping Information and News
There are businesses out there that still don’t understand the importance of good cash management and still struggle with the ATO requirements of Superannuation and GST. The process of managing these obligations is to plan ahead and put money away to cover the costs when they arise. It would appear that businesses spend the GST on operations when in fact it should not form part of their operating income. If you move it out of the general banking accounts into a deposit account as you receive funds not only will you be able to pay your liabilities you will earn interest on that money as well.
Professional Bookkeeping Requirements
Raising the level for the bookkeeping profession on educational requirements, certifications and experience is a step in the right direction to ensure the bookkeeper you employ fully understands the correct procedures of the financial management of your business and making them more accountable in relation to the duty of care and the services they provide. Some of the main changes will include the management and lodgment of business activity statements (BAS). As from 1 July 2011 not only do BAS Agents have to be registered they must also hold the relevant professional indemnity insurance and hold a minimum of the Certificate IV bookkeeping qualification
Business Growth and Health
Knowing how your business in progressing on a regular basis allows you to determine if the business is growing and also which direction you want to take it next. Carrying out regular health checks on the financial aspects assists in these determinations. Regular Financial and Cash flow reports and analysis are the major tools in business health checks.
Financing Selling or buying a business
Since the global financial crisis banks have been reluctant to lend funds to small business for growth and development. Without proper records and financial reports the banks are unlikely to consider approving finance for your business. The same will apply if you have outstanding tax or super debts. Ensuring that your records and compliance issues are up to date make applying for finance that much easier. Without proper records there is no defined value of the business and an informed decision cannot be reached. Due diligence on the records is a crucial part of the decision making process.
News for Bookkeeping
Better Bookkeeping Methods
I read an interesting article about the teaching methods it was titled “What they don’t teach you at accounting school” regarding the practical side of business. The author points out some issues that concerns*the gap between the theory that students learn at university or TAFE and its practical application” Although this is aimed at accountancy the same can be said for book keeping. Businesses these days really do look to their accountant and bookkeeper for more than just data entry and basic reporting. For more information please read Practical Bookkeeping Skills that are not taught in classroom courses
Why keep records ATO Compliance
The ATO requires proper records to be kept of your business transactions. The records must explain each transaction and the original documents must be kept for a period of 5 years from the last time they were relied upon. (Lodgement of your annual tax return). The records should also show the calculations that the entries were based upon.Failing to keep proper records may result in penalties on undisclosed income or may mean that you are not claiming deductions that you are entitled to.