Bookkeeping Business Suggestions

As a business owner - you are busy right?

Suggestions for businesses to assist with your bookkeeping:

1. If invoices need to be raised and sent to a customer - do it immediately.
Invoices raised while fresh in your mind ensure no mistakes on the invoice. Once you've raised the invoice, email or post it the same day - but check it before you send it. A great stalling tactic for customers to not pay an invoice is that it contains incorrect information and a credit needs to be raised before they will pay it. Make sure you are sending correct Tax Compliant invoices!

2. Monthly Statements
Most small business who have account customers have never sent a monthly statement to their customers. Some of the reasons for this are "it's simply additional time and cost", "they've got the invoice, they can pay on that" etc etc. Sending a monthly statement to customers is an excellent collections tool as it reminds the customer that payment is due. Reduce your postage cost - contact your customers and ask for the Accounts Payable contact person and their email address. Use an accounting package like MYOB which holds your customer database and can email monthly statements to your customers - straight from MYOB! Saves you money and time and will increase your cashflow with more payments coming in without having to remind your customers! 

3. Reconciling your accounts
It's easier to reconcile your accounts daily to weekly rather than weekly to monthly. Set aside some time either each day or at least once a week so that transactions are still fresh in your mind. Trying to reconcile something that happened six months ago will prove to be very difficult. Five minutes a day may reduce your stress and your workload!

4. Make sure you know your customer - Is your customer creditworthy? Will they pay you?
Most small business will issue an invoice to a customer if they have an ABN. This means that the customer can take the goods immediately and you generate a sale. Good for you, good for the customer. What if they don't pay you? How much will it cost you in trying to collect the money owed? Before you allow a customer to have an account, you should, at the bare minimum, conduct some internet searches on the customer. Electronic White Pages (EWP) to confirm the business contact details, ASIC if it is a company, to ensure that there is adverse company information such as that strike off action has been initiated against the company and lastly check the ABN to ensure you are billing the correct entity. Raising an invoice to 'Bill's Bookkeeping' when the actual entity is 'Bill Smith trading as Bill's Bookkeeping' could cause issues if you need to pursue through legal channels. 

5. BAS, PAYG, Super and WorkCover
As frustrating as it is, it all HAS to be paid. If you can't pay your BAS/PAYG, make sure you still lodge it by the due date - there are penalties for not lodging on time. Once you have lodged the BAS, ring the Tax Office and discuss a repayment plan with them. The Tax office would prefer to make an arrangement with you than chase you for it! Same goes for Super and WorkCover. Never bury your head - always contact the relevant authority to discuss fixing the problem.

6. Save for BAS, PAYG, Super and WorkCover
A simple suggestion here - open a fee free high interest savings account - there are plenty of financial institutions providing these. Every week, send enough money to the high interest fee free account to cover your current Statutory liabilities. Not only are you ensuring you have the money readily available to pay when it falls due, you are also earning interest on money collected for the government!

7. If I employ a bookkeeper, why shouldn't I just choose the cheapest?
The simple answer to this is - you get what you pay for. We have seen bookkeeping rates from $25 per hour up to $70 per hour. A bookkeeper charging $35/hour has to work twice as fast to make the same income as the bookkeeper charging $70/hour - this can lead to errors and poor overall work. Maybe a cheaper bookkeeper doesn't have the skill or the confidence to complete the job you need done. By the time your accountant sees the books, they are 12 to 18 months old. You don't want errors that old because you'll never figure them out! Good bookkeeping is a crucial part of any business.

8. I give all my paperwork to my accountant to sort out - why would I need a bookkeeper?
Accountants charge a high fee to manage a businesses' day to day bookkeeping requirements. Bookkeepers are a cheaper option and can provide the same records required to give to your accountant at tax time. Accountants in general should be utilised to verify your books, to prepare financial reports and your end of year tax returns.

We hope you find these suggestions useful!

 

Contact JPAP Adelaide Bookkeeping today and let us free up your valuable time