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Bookkeeper Services – An Ideal Way To Avoid Some Common Business Pitfalls

Bookkeeper Services – An Ideal Way To Avoid Some Common Business Pitfalls

Bookkeeping is a crucial business operation whose importance can’t be stressed enough. As a small business owner, you’d be conscious enough to maintain proper financial records which I believe are hard to maintain without effective bookkeeper services.

Being a tedious and time-consuming task, bookkeeping often appears evil to businesses. However, it’s not the case when a certified Xero or Quickbooks bookkeeper takes the obligation over their shoulders. For example, they are professional enough to organise and store your day-to-day financial and accounting documents including journals, ledgers, financial statements, income tax records, and much more.

Furthermore, expert bookkeeper services help your business prevent the following pitfalls.

5 Most Common Pitfalls Bookkeeper Services Help You Get Rid Of!

As mentioned above, most businesses, especially the ones just starting up, view bookkeeping as evil due to a variety of reasons. Due to this, they end up committing serious financial blunders they should have avoided with expert bookkeeper services. Here’s how bookkeepers help your business in this scenario.

 

Poor and improper record-keeping

 

Bookkeeper Services

 

For small businesses, improper or poor receipt and record-keeping is the biggest challenge in their initial phases. For example, misplacement of purchase receipts or ignoring significant expenses are most common.

Maintaining detailed monthly records with a proper filing system is highly essential as it saves you time and money on your income taxes. Furthermore, proper bookkeeping provides you with the necessary documentation on time in the event the audit team pays a visit to your business.

Pro tip: You’d know how ATO audits businesses to prepare for the same in the future.

 

Incorrectly organising your small business expenses

 

Do you incorrectly organise your business expenses? Stop doing that!

According to the formal bookkeeping practices, correctly organising your business expenses is of utmost importance. This ensures proper measurement of your business’s profitability.

Incorrectly organising your small business expenses

Additionally, understanding the different tax treatments of your different incomes and expense categories helps in savings and tax deductions as well.

Thus, make use of the professional bookkeeper services as soon as possible.

 

Not reconciling your small business bank accounts

 

Not reconciling your small business bank accounts

 

It’s common for small business owners to neglect the need to have separate bank accounts for personal and business financial activities. However, it’s a major issue you must resolve at the earliest.

This is because the auditing team would always ask you to present your complete business financial records that are separate from your ones. Additionally, you’d understand what bank reconciliation is, why it is done monthly, and how it helps to minimize errors and identify potential issues.

Again, effective bookkeeper services help with your prompt bank statements reconciliation.

 

Not having automatic and cloud backups

 

Bookkeeper Services - An Ideal Way To Avoid Some Common Business Pitfalls (2)

 

Today, having automatic and cloud backup of your crucial financial data and other things is as important as oxygen is to breathing. This is because nowadays, businesses often come face-to-face with sudden hardware failure, viruses, and human errors that lead to lost financial records that may never be restored.

Thus, automatic and cloud backup of the same are necessary as they help avoid the after-effects of all these.

Today’s bookkeeping software such as Xero & QuickBooks comes with the feature of automatic and cloud backup to keep your records safe for eternity.

 

Trying to do books yourself

 

Most small business owners dislike doing books by themselves but still insist on doing them to control expenses. However, it’s not recommended.

Bookkeeping is a significant business operation that can both make or break your business if not done properly. By handing over its duties to professional bookkeeper services, you can relish the peace of mind of getting every possible subtle error located and corrected that might otherwise be missed.

Last but not least, being experts, they ought to be aware of the latest tax laws & changes that could affect your day-to-day financial practices if not implemented early.

Hence, these are the most common five pitfalls effective bookkeeper services helps you avoid.

 

Final Words!

 

To assist you in your record-keeping, we’ve got something for you. We, at Outbooks, don’t just picture bookkeeping as mere data entry practice. It’s not something anyone can appoint a junior person from staff with no information on bookkeeping to do.

When you hire bookkeepers, you long for peace of mind, which also involves taking chores like recording and payroll off your plate.

And when done correctly, the bookkeeper can stay with you for a long time and genuinely have a striking effect on your business’s success.

We take immense pride in introducing you to our certified bookkeepers who carry an abundance of experience on their shoulders and are the support pillars of infinite firms they have worked relentlessly for.

Not to forget that we are certified by XERO. In a nutshell, we are proficient in multiple-accounting software, and that’s our identity.

Contact us today to book your free trial, and you focus on the work that matters to you, and we’ll take care of the rest!

Let’s connect on +61 451320102

Or

[email protected]

Bookkeeping For My Small Business – Here’s How To Do It Correctly In 2021

Bookkeeping For My Small Business – Here’s How To Do It Correctly In 2021

Irrespective of your business size, bookkeeping is an important operation that requires significant attention. Not only it helps you understand your financial health but also keeps track of your small business’s cash flow. Besides, there are tons of other advantages of bookkeeping for small businesses. For example, it helps you separate your business and personal finances, identify & prevent financial errors, streamline your tax processes, among others.

Now, there are multiple ways of doing bookkeeping for your small business. The most common among these are either hire an in-house bookkeeper or outsource your bookkeeping operations. However, being a small business owner, you can also do simple bookkeeping of your business. If you choose to do bookkeeping by yourself, here’s a complete guide to help you out.

 

Important Bookkeeping Terms You’d Know Before Starting Out | bookkeeping for my small business

 

If you’d search “how to do bookkeeping for my small business” online, you’d come across the following list of important terms. Let’s go through them first.

Accounts Payable (AP)

Bookkeeping For My Small Business

It’s the account that keeps the record of all money you owe to the third party(s). These include suppliers, banks, governments or anyone you borrowed money from.

Accounts Receivable (AR)

Accounts Receivable (AR)

It’s the account that keeps the record of all money the third party(s) owe to you. In simple words, if you were to receive money from anyone, it’ll fall under the account receivable category.

Assets

Assets are those things owned by you to successfully steer your business. For example, cash, vehicles, electronics, buildings, and much more.

Balance sheet

Balance sheet

A balance sheet is the backbone of your business that presents you with your business’s financial condition. In simple words, it breaks down the assets, liabilities, and capital of your business for analysis.

Bookkeeping | bookkeeping for my small business

Bookkeeping

Bookkeeping is the practice of recording your business’s day-to-day financial transactions and other documents such as purchases, sales, receipts, and payments.

Capital

Capital signifies the total money or assets that personally belong to you. Additionally, it’s worth noting that “capital” doesn’t include the revenue or profit generated by your business.

Depreciation

It’s defined as the loss of value of your assets over some time due to a variety of reasons.

Equity

It’s the money you put into the company as the owner. Plus, it also includes all the accumulated profits.

Expense

Whatever money you spend to operate your business is called an expense. It’s not related to selling your services. For example, the money you spent to purchase laptops for your employees is an expense.

General ledger

It’s the account that contains all the transaction data required to generate the income statement, balance sheet, and other financial reports.

Journal

A journal is a place where the bookkeeper stores all the transaction details for easy & quick access as and when required.

Payroll

Payroll is the process of compensating your employees for a set period or on a given date. It’s the biggest component of a bookkeeper’s duty.

Revenue

It’s the money you make through selling your services. Your business revenue also includes the money you get by selling the assets your business don’t need any longer.

Trial balance

Trial balance

It’s a bookkeeping worksheet. In a trial balance sheet, the balance of all ledgers is collected into debit and credit account column totals that are equal.

When you’re starting with bookkeeping, you should have a clear understanding of the above terms.

As your next step, below are some useful tips to properly execute your small business’s bookkeeping operations.

 

Expert Tips To Execute Your Small Business’s Bookkeeping Operations

 

I bet the following expert bookkeeping tips will transform your small business into a money maker and answer your query “how to do bookkeeping for my small business”.

  • Always create a new business account to keep your finances and your business dealings separate. Thus, at the time of bookkeeping, you’ll know where to look for the required financial information.
  • It’s recommended to budget for tax separately to avoid paying a big chunk at once. For example, you can set aside a
  • small portion of your income in a savings account or something similar. Then, use this saved money to pay off your tax as and when the taxman knocks on your door.
  • Always keep your records organised for easy access in the future.
  • You should track all your business expenses irrespective of their magnitude. For example, track the money spent on office upgrades, equipment upgrades, and so on.
  • Use any cloud-based bookkeeping software like Xero, QuickBooks, or MYOB to maintain your daily records.
  • Mind your account receivables. Keep eagles eye on your receivables as it can affect your cash flow.
  • Don’t miss your tax due dates. Not filing your tax returns on time not only invites tax penalties but also worsens your taxation process.
  • Last but not least, go digital! The Australian Taxation Office (ATO) lets you do the majority of your tax reporting and transactions online through their digital services.

Hence, these are the top expert tips to assist you in your small business’s bookkeeping.

The Final Verdict

Bookkeeping is an essential component of your business that keeps you on the top of your financial game. Though you can carry out bookkeeping for your small business by yourself, it’s not a good idea for a fast-growing business.

In that case, outsourcing your bookkeeping services works out the best. Thus, if the same thoughts are striking your mind, partner with Outbooks, your right outsourcing partner.

We provide a multitude of Xero bookkeeping and accounting services to empower your business, such as data entry, account receivable & payable, account management, and much more.

Contact us today to book your free trial, and you focus on the work that matters to you, and we’ll take care of the rest!

Let’s connect on +61 451320102

Or

[email protected]

5 Small Business Accounting Errors To Avoid In 2021

5 Small Business Accounting Errors To Avoid In 2021

Being a business owner, it’s obvious you’d look to save a few bucks of money by taking all possible sorts of work on your shoulders. These primarily include your small business accounting errors and bookkeeping duties. While there’s no issue in that provided you’re certified in either or both of these, it’s not the case mostly.

Additionally, even if you aren’t certified, the Australian taxation office is there to support your small business through various measures. Furthermore, with the tax season being the crucial phase of any business, you’ve got this tax time toolkit to prepare for your next tax season.

However, when it comes to growing your business, a few decisions and avoiding a few small errors can pay off well. These include how well you set up the management of your firm’s finances and avoid the following small business accounting errors.

Small Business Accounting Errors You’d Avoid At Any Cost!

According to surveys, a large fraction of small business owners tackle the tasks required to pay bills, invoice consumers, among others on their own and fail miserably. The situation worsens up further due to the following small business accounting mistakes.

 

Failing to take a professional accountant on board

 

Failing to take a professional accountant on board

Failing to take a professional and experienced accountant on board is the first mistake that takes a toll on every business. By hiring a professional to handle your business’s accounts, the probability of errors in the key areas reduces. These include expense tracking, paying vendors on a timely basis, balancing bank accounts and staying on top of payroll.

Moreover, a professional hand can handle your employees’ withholding taxes properly, track all your financial transactions, and much more.

If you can’t hire a full-time in-house employee due to the fear of overhead expenses, hire a virtual freelance bookkeeper or accountant. This will save you a lot of bucks without compromising the work quality.

 

Not tracking your business records correctly

 

Not tracking your business records correctly

For effective bookkeeping and accounting, tracking the records accurately is necessary. When records are not kept accurately, you invite the following problems.

  • Vulnerability to losing money,
  • Being late on important bills,
  • No preparation for the tax season,
  • Unable to plan for the next month or beyond, and so on.

Any error while entering the transaction data into the spreadsheet or failing to reflect a bill payment can cost your business a huge sum of money. Hence, it’s important that record keeping is done by experienced hands instead of you. This will likewise measure the health of your business.

 

Mixing your finances with business accounts

 

Mixing your finances with business accounts

It’s common indeed for small business owners to mix their finances with that of their business. Though it’s understandable at this point when you’re just starting up, it can/should be avoided.

Let’s take an example.

You head to the nearby Walmart store to pick some important office supplies. However, since you’re already there, you pick some home stuff too.

So, what’s the big deal about this?

You should know that it’s more than just having the office stuff & personal stuff on the same Walmart receipt. According to Clutch, over one-quarter of the small business owners and/or managers lack a separate bank account for their business.

Not separating the personal transactions from the business ones can be a big headache with the tax season around. Moreover, there are high chances that you might miss an important expense that you could list as a business deduction.

Besides, there are several other drawbacks of mixing your finances with that of your small business. For instance, you might struggle to apply for a business loan or line of credit.

Improperly managing the billing

Improperly managing to bill or invoicing customers is another major small business accounting mistake you’d avoid. By effectively billing or invoicing your customers, you ensure that your revenue comes in on time. Thus ensuring that you can utilise it for business expenses, payroll, and other needs.

Consider this.

If any invoicing gets delayed, it’d take more time for the customer to pay. This will make it difficult for your business to cover its bills due to late payment.

Hence, it’s a recommendation to immediately invoice your customers after fulfilling your end of the transaction.

 

Not planning for the upcoming tax season

 

accounting errors

To save money on accountants or tax specialists, small businesses often get attracted to the DIY tax software to prepare a simple tax return. Though it’s simple to use, it again requires knowledge and experience.

If you’re not organising & recording all manner of receipts and documents for 11 months of the year, you can’t avoid the struggle to organise them to file the tax return in April.

Hence, you must plan for your tax season by properly organising and tracking your receipts and other documents throughout the year.

These are the top five small business accounting mistakes you avoid at any cost.

Conclusion

We take immense pride in introducing you to our bookkeeping experts who carry an abundance of experience on their shoulders. Furthermore, they are the support pillars of infinite firms they have worked relentlessly for.

Not to forget that we are certified by XERO. In a nutshell, we are proficient in multiple-accounting software, and that’s our identity.

Contact us today to book your free trial, and you focus on the work that matters to you, and we’ll take care of the rest!

Let’s connect on +61 451320102

Or

[email protected]

Bookkeeper – Your Ultimate Guide To Hire The Best Candidate In 2021

Bookkeeper – Your Ultimate Guide To Hire The Best Candidate In 2021

Bookkeeping is important for any business to survive and flourish. How much did you spend on your last office upgrade? How much revenue did you earn from inventory? If you want accurate and up-to-date records of your financial transactions, you must acknowledge the importance of Bookkeeper. Even the Australian Taxation Office (ATO) emphasizes record keeping for small businesses.

Today, bookkeeping is no longer a luxury but a necessity for your small business. It’d help you track your cash flow and understand what’s happening on a basic financial level. Furthermore, effective bookkeeping lets you make informed financial decisions that help you avoid under or over-spending.

Moreover, a Xero bookkeeper will help you overcome these questioning financial challenges. If you’re motivated enough to hire a bookkeeper for your small business, here are my tried & tested tips you’d consider.

Here’s how you can hire an ideal bookkeeper for your business

Here's how you can hire an ideal bookkeeper for your business

As said initially, effective and sharp financial decision-making is important for every business to develop. Not only it shapes the financial fortunes of your business but also maximises returns for its shareholders.

What I’ve noticed is that most business owners lack the aptitude of hiring an ideal bookkeeper that’d add value to their business. To overcome this, I’ve compiled the following expert tips for the best hiring. So, let’s dive into this right away.

1. Hire someone with exemplary attention to detail

Since a bookkeeper is going to track, record, and organise your business’s day-to-day financial transactions, the candidate’s attention to detail is the deciding factor here. That is, if your bookkeeper lets things fall through the cracks and doesn’t follow up on every minute item, he/she is going to let your business down.

An ideal bookkeeper is one who is a hawk i.e. someone who fusses about being able to account for every financial detail correctly in their books.

2. Don’t trust Google blindly! Ask for referrals from trustworthy industry sources

Don't trust Google blindly! Ask for referrals from trustworthy industry sources

When you’re hiring a bookkeeper for your small business, your obvious Google search “best bookkeeper near me” isn’t going to produce useful results. Instead, relying on your industry’s referrals is a much better option.

For example, if you have an accounting firm that you trust, enquire whether they can provide you with bookkeeping services as well. If not, ask them if they have contact with any trustworthy bookkeeper they can refer you to.

As your last resort, you can contact the Institute of Certified Bookkeepers or ICB.

3. Find out which bookkeeping software they’re familiar with

Find out which bookkeeping software they're familiar with

Today, bookkeeping has gone modular with the introduction of easy-to-use cloud-based bookkeeping solutions such as Xero, QuickBooks, MYOB, Sage, among others. Hence, you’d find out which software among these the candidate is most familiar with. After all, you won’t want to hire someone who is an expert with software you don’t even use or have ever heard of!

For your reference, Xero and QuickBooks are currently the most in-demand bookkeeping software. Hence, either of the Xero or QuickBooks bookkeepers would conclude your search.

4. Hire a professional bookkeeper for more advanced bookkeeping services

Put the myth “bookkeeping services are fairly straightforward” off your mind when you’re looking for a bookkeeper. This is because not all bookkeepers would work the same way and generate the same financial reports for you.

For example, the standard bookkeepers offer the following standard financial statements to understand your business’s financial health.

  • Income statement,
  • Balance sheet,
  • Cash flow statement, etc.

However, as your business will grow in the future, merely the above basic statements won’t suffice. Thus, you’d need someone who could accommodate your requests regarding the statements like:

  • Statement of changes in shareholder equity,
  • A capitalization table,
  • Sources and uses of funds statement, etc.

This can only be done by a professional bookkeeper. Therefore, it’s better to hire a professional bookkeeper. 

5. Check the professional demeanour of the bookkeeper

Merely business knowledge isn’t everything you must take care of. The candidate’s professional demeanour is also a serious point of consideration here. Bookkeepers are the key aspect of the fiscal operations of your small business.

Thus, they will engage with both your staff and outside clients & vendors. Hence, hire someone who can conduct themselves professionally and whose personality matches your company’s culture.

6. Keep in mind the candidate’s tax preparation and planning skills

The major issue most businesses face is preparing for the tax season. Hence, the bookkeeper should have the required skills to get your company prepared for tax season. For example, the candidate should know the applicable tax deadlines for items like quarterly tax estimates. Further, knowledge about how to keep books and receipts organised for the tax season and audits is compulsory.

Pro tip:

Hiring a bad bookkeeper could hinder your business operations and financial growth. Hence, you must perform due diligence before inviting anyone for the hiring process. Further, if you’re not in favour of a full-time bookkeeper, contact any outsourced accounting firm.

They will provide you with both, affordable part-time bookkeepers & other support(s) without hitting your pocket hard.

Final verdict

To further assist you in your record-keeping, we’ve got something for you. We, at Outbooks, don’t just picture bookkeeping as mere data entry practice. It’s not something anyone can appoint a junior person from staff with no information on accounting to do.

When you hire bookkeepers, you long for peace of mind, which also involves taking chores like recording and payroll off your plate.

And when done correctly, the bookkeeper can stay with you for a long time and genuinely have a striking effect on your business’s success.

We take immense pride in introducing you to our certified bookkeepers who carry an abundance of experience on their shoulders and are the support pillars of infinite firms they have worked relentlessly for.

Not to forget that we are certified by XERO. In a nutshell, we are proficient in multiple-accounting software, and that’s our identity.

Contact us today to book your free trial, and you focus on the work that matters to you, and we’ll take care of the rest!

Let’s connect on +61 451320102

Or

[email protected]

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