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The Basics of Bookkeeping Every Small Business Owner Should Know

Bookkeeping is a fundamental yet critical activity in every business. This activity helps keep track of all financial expenses and spending as well as the income receivable through clients. Only through efficient bookkeeping can one trace back their steps to figure out financial anomalies or errors in balance sheets.

To be on top of all your transactions, one must know certain tips for bookkeeping. Below is one of the most crucial techniques to maintain and record all expenses and income flow.

Bookkeeping Must Be Organised.

This is one of the most crucial tips for bookkeeping. Every slip, salary payroll, receipt, banking update, and transaction update corresponding with the explanation of the expense must be arranged chronologically; if you are trying to verify that your employee has cleared dues with a vendor last, for example. It should not take an hour to sort through a stack of receipts to find what you were looking for.

Track all Your Expenditure.

You must make sure that spending is recorded on a daily basis. Every day in a business firm, there are new problems to solve and new clients to cater towards. Therefore, people can easily forget or misplace transaction details. It is wiser to use suitable software for your bookkeeping needs.

Keep a Tax Budget Ready.

Taxes are not very straightforward. The ATO gives some tax relief for certain expenses and levy taxes for other purposes. Therefore, based on history and a little help from your accountant, you must keep a budgeted tax fund aside. This helps in understanding your actual earnings and profits in contrast with earnings with taxes.

Keep Track of Accounts Receivable.

This is very crucial in bookkeeping and maintaining a good cash flow. The customers who still need to pay for the product or service must be kept track of. Nothing is more frustrating than estimating your income and finding discrepancies between expected and actual cash flow. This can be very taxing while bookkeeping. Hence make a different list of entities that owe the company money to stay on top of things.

Keep a Watch on The Deadlines.

There are many deadlines in businesses. Some are related to paying taxes, and others are about paying your vendors or distributors. There could be other important things, such as the due date to pay an EMI or some annual bills. All these dates are critical. Bookkeeping must include keeping a watch on the dates to do the needful beforehand.

Consider MAS for your small business accounting needs

Bookkeeping is a very laborious process and can be counterproductive if done by a non-professional. Think of us to get expert small business accountants in Sydney for the tasks of bookkeeping, tax filing, financial reporting and much more. Contact us here.