Is Your Bookkeeper Stealing From You?

Having a bookkeeper gives small business owners peace of mind knowing that income and cash flow are well taken care of. However, discovering that your bookkeeper is stealing from you only denotes that your business has very little chance of success. The tricky part about bookkeeping is that you will never know that fraudulent transaction happens until you discover your financial records. Failing to pay close attention to your records can make you more vulnerable to employee theft. Here are signs our bookkeeper may be getting more than just his or her paycheck:

1. Discrepancy with your bookkeeping records

One of the things to look for when you are highly suspecting your bookkeeper of stealing from you is by checking your bookkeeping records. This is one way to detect that your bookkeeper has been manipulating your records. While occasional adjustment is considered normal, seeing a pattern without any valid explanation only shows that there is a serious problem. If books are not adding up and you do not know where problems are coming from, you will need to ask hard questions to find out about the discrepancy.

2. Maintaining higher level of secrecy

If there is one person that should be the most open within your business, it is your bookkeeper. A bookkeeper is responsible for showing you everything within the bookkeeping software at all time. It is a cause for concern once a bookkeeper is trying to hide the books from you. Since you are the business owner, there is no valid reason that you should not see the books. If a bookkeeper is habitually stealing from your company, he or she will hesitate to turn over financial information.

3. Insufficient cash flow

Businesses regardless of the size should give importance to cash flow because it is the lifeblood of every business. The reason you hired a bookkeeper is to keep your business on the right track. Most business owners can easily predict the levels of cash based on the number of customers they have. The number of invoices being sent out also gives you an idea of your funds. You can easily uncover a problem by considering this factors.

4. Resisting bookkeeping assistance

Although bookkeeping for small business is a job that one person can work on, there are times when two heads are better than one especially when you are you have a lot of bookkeeping obligations to handle. However, a bookkeeper who prefers to work on their own may have an ulterior motive, which you need to find out as this is considered a red flag.

How To Stay Ahead Of Competitors As A Small Business Owner

Even if you are a small business owner, it does not necessarily mean that you have no reason to stay ahead of your competitors. If others have cutthroat instinct for survival, you too should have some strategies that can help you thrive in a competitive business world. Even the best ideas can flop. This is why having a competitive advantage is one way you can pull ahead of your competition. Here are four techniques that can help you outperform competitors.

1. Identify strengths and weaknesses.

Your competitor may have an edge over your products and services, but this does not mean that you cannot emerge victorious. Every company has a weak point and this is something that you can use to outperform them. A company with a great product may have the poorest customer service. Find out what makes your company a better choice. It is also important to consider marketing and presentations. Even your prospective customers should know the importance of these selling points.

2. Keep customers involved.

Your product may be great today, but it can be easily forgotten the next day once they find a better replacement. However, if you are going to ask customers how you can enhance your product,  your competitors will be the last thing for you to worry about.

3. Choose large clients

One reason small business owners should go after larger clients is that they can help you yield better results such as increased revenues and more business. Compared to small companies that may require hand holding, larger clients are easier to service. You can also improve your credibility and even meet potential prospects. If the thought of approaching larger companies intimidates you, think about the long-term benefits you can get such as moving faster and gaining better ideas.

4. Keep track of your financial health

Any profitable business should never remain complacent just because of a good business performance. Your competitors can be like a thief in the night that will steal your position at the drop of a hat. If you are going to allow other businesses to pull ahead of you, growing your business will be a challenge. There is a good reason you have a good bookkeeper and that is to keep track of your financial health. Make sure you are checking your financial statements so you will know if your business is doing well.  Ask your accountant or bookkeeper about some recommendations to improve your business.

Change is also essential to stay on top of your game. This means that if you are still into traditional business process, you need to up your game by embracing technology.

5 Signs You Have A Great Bookkeeper

A business will not be complete without hiring a bookkeeper. In searching for a great bookkeeper, there are some qualifications that must be taken into consideration. Keep in mind that you will be entrusting the most important aspect of your business and an incompetent bookkeeper will not be able to provide sound advice and recommendation.

Aside from training and accreditation, your bookkeeper should also be experienced. It is not easy to monitor your business and a less experienced and less qualified bookkeeper will not help you accomplish your financial and business goals.

If you have been keeping a bookkeeper for quite a long time, here are some signs that you have hired a great one:

1. They completely understand the process.

A bookkeeper who knows the ins and outs of your business will understand how it works. Being able to understand your process enables bookkeepers to find the best solution possible to ensure that your business will become successful in the end. A bookkeeper who has the ability to understand the process will see the areas of your business that you can streamline.

2. They ask questions.

Some business owners may not entertain questions as they find it annoying. However, bookkeepers want to ensure that every transaction made is correctly allocated. This is why a bookkeeper who really cares for your business will ask questions instead of simply guessing which direction your business is going to take. A business owner may assume that everything is going fine, but upon inspection, you will realise that the figures are not correct.

3. They know their scope.

The accountant’s job differs from the bookkeeper’s. A great bookkeeper knows what they should do and they will even collaborate with the accountant to gain the best solution so your business will have a healthy financial state.

4. They do their homework.

Business strategies need to change as technology changes. Since trends come and go, bookkeepers should take the initiative to keep up with the changes. These days, cloud technology is one way to make every transaction easy and hassle-free. A reliable and trusted bookkeeper should know when to make the switch. A business owner may not easily agree to the changes, but explaining how the transformation will create a positive impact on the business will make a difference in convincing the business owner.

5. They can be trusted.

It is not easy to hire a trusted bookkeepers these days. Some business owners are not comfortable sharing their financial details with their friends or even family. A bookkeeper should know how to keep confidential information private.

Do You Know How Your Business Is Doing?

Hiring a bookkeeper keeps every business owner sane as they are provided with regular financial reports that determine the financial state of their business. Managing payroll, monitoring expenses, tracking income and paying taxes are just some of the tasks a bookkeeper should carry out. While bookkeepers know best, you still need to take part in ensuring that your business is in good hands. It all starts with asking the right questions.

Is my business generating profit?

Many business owners are completely clueless about their business performance. More often than not, they rely on bookkeepers to provide numbers, but without basic bookkeeping knowledge, understanding the records will be a challenge. Business owners who are eager to know where their business currently stands should know whether or not their business is profitable. Your bookkeeper can make comparisons between financial performances in the previous years. Once you know how to compare business performance, you will have an idea if you still have sufficient cash.

Am I overspending?

Since monitoring your expenses ensure your cashflow is intact, you also have to ask your bookkeeper how much you are spending on a regular basis. When paying wages, make sure computations are correct. You should also take note that the benchmarks for wages costs will vary from business to business.

How can I grow my business?

It is never easy to move forward if you have no idea how to grow your customer base. However, making an investment to seasoned business owners is already a breeze because they have the ability to integrate customer relationship management and job management software packages. As a result, business owners can gain a better insight into their current customer base. When you have an idea who your customer base is, you can formulate marketing initiatives and planning so you will be able to grow your business.

What can I do to improve my financial literacy?

Business owners need to sit down with their bookkeeper to obtain information tailored to the needs of their business. Each and every business has needs and these needs will not be addressed unless a business owner has an honest conversation with the bookkeeper. Even if you are the business owner, there are still some aspects of your business that you need help with. You should know who your top customers are. Your bookkeeper can provide recommendations and even help you understand how your business works.

 

3 Simple Changes That Make A Huge Difference To Your Business

Bookkeeping may be one of your least favorite tasks unless you are having fun working with numbers. This is why some business owners deliberately ignore bookkeeping without realising it has a serious impact on their financial health. Bookkeeping involves record keeping so you will know if you still have enough money left for growing your business or for other business plans. Keeping financial details in your head will not help as there are too many distractions at work. For instance, you might be planning to get new bookkeeping software, but it has totally slipped your mind because of an urgent meeting with clients. A proper system and process in place will help you avoid any unpleasant surprises that may ruin your future plans.

Track your expenses

Have you ever wondered why you are struggling with making ends meet despite making a huge profit? You might be missing out one important task, which is tracking your expenses. Lunches, special events and occasional travels can affect your business if you do not properly monitor how much you are actually spending. Preparing audit for these expenses can have a positive effect on your tax records.

When tracking your expenses, be sure to categorise everything. Driving long distances to meetings must also be tracked so you will know the cost associated with your travel.

Save money for taxes

Putting money aside for taxes will help prevent incurring penalties and interest from the ATO. Failing to set aside money for taxes is one mistake business owners usually commit. Interest and penalties can ruin your budget and may even have a snowball effect on your financial performance, especially when the money you put aside for your monthly bills has been used for paying late fees. This is not a smart move because the lack of funds will deter you from expanding your business.

Monitor your invoices

Not keeping an eye on your invoices can hurt your cash flow. As a business owner, you need to assign a bookkeeper to track your billing. This way, you will know the people who have already made a payment. Some savvy business owners invest in a reliable bookkeeping system to ensure that no payments are missed and incurring penalties are prevented.

Handling your money wisely ensures you achieve your long-term goals and operate your business smoothly. These simple changes can also help you stay out of trouble with the ATO. Even if you are operating a small business, hiring a bookkeeper is a wise move.

4 Practices That Can Expose Your Business To Financial Risk

Some business owners think that major events such as a stock market crash has the biggest impact on finances, but bad habits are the ones that can expose your business to greater risk. While everyone wants to enjoy financial freedom, it does not necessarily mean you should not manage your finances well. More often than not, these risks can affect your actions and may even become a deterrent to potential business growth. If you want to make the right choices, you need to avoid these biggest risks:

Underestimating the value of planning

Your business may be in the right direction, but this does not mean that you should be complacent about your business performance. Things can get unpredictable and without proper planning, you will not be able to overcome challenges. Whether you want to accomplish some business goals or you want to grow your business, be sure to create a plan for the future. This way, you will be able to have sufficient preparation that prevent you from hurting your business.

Investing without making long-term goals

Investing is a sign that your business is ready to take risks. However, it can also be tricky especially if you are not prepared for the results. Before you invest, make sure you have done your research. It is not enough that you research how and where to invest because you should also get the best advice from experts.

Not consulting an expert

Financial security does not take place without consulting a professional. If you own a small business, make sure you employ the right people that will be instrumental to the growth of your company. Putting the right people will enable you to reach your financial goals and implement plans.

Ignoring your expenses and budget

Going over your budget is important as this enables you to determine what you should do next. If you know the amount you are spending and the money left in the bank, you will not make any hasty decision that can jeopardise your business. Reviewing your financial statement will give you an accurate picture of your financial health. You will also identify whether or not you should reassess your spending habits.

Hiring a bookkeeper can save you from any disaster that these risks may entail. Regardless of the size of your business, it pays off to talk to a professional who can help you put things in proper perspective. Avoiding these risks will also give you good night’s sleep knowing you have a reliable person to take care of the financial aspect of your business.

Tips For Avoiding ABN Cancellation

If you are operating a small business, one of your responsibilities as a business owner is to make sure that it generates profit. Once ATO deems your business to be more of a hobby than an enterprise, ABN or Australia Business Number will be cancelled. If your business has also violated the terms and conditions of setting up a business and you are no longer operating your business you are most likely to have your ABN cancelled as well.

There are ways to avoid ABN cancellation and as a business owner, you need to make sure that you have a viable plan and effective business management. Even if you are running a small business, you can still make sure that it is going to be in good hands if you consider hiring a bookkeeper.

A bookkeeper prepares the financial statement and report so business owners will have an idea where their business is going. A bookkeeper also gives business owners peace of mind knowing that their business has enough to survive. Although having enough is not a proof that your business is going to be profitable, you will have an idea of the aspects that you still need to improve.

A bookkeeper prevents ABN cancellation by ensuring that you have a steady cash flow. While watching over your cash flow is not deemed be-all-and-end-all of running a business, ensuring that your cash flow is not in danger can help you maintain its stability. With the help of your bookkeeper, your assets and actual liability are going to be separated so you will know the sum of money that goes to your business savings account. It is also easy to determine whether or not you are making a profit or a loss once your financial statements and reports are organized.

You may also have to take various financial factors into consideration

• Reconnect With Your Associates
When it comes to networking with people, you need to make sure that you have a continuous or ongoing process. Consider reconnecting with your business associates as you can get advice from them especially when it comes to creating viable action plan.

• Build New Connections
Aside from reconnection with your associates, you should not also forget to build new connections. Make sure you have two or three acquaintances that you can build a good working relationship with. You should give importance to community as it can serve as your strong system of support especially for tough times.

• Assess Your Goals
If it has been a year since you opened a small business, make some assessment if you have achieved all of the goals you set. If there are goals which you have not accomplished, determine the factors that deterred you from accomplishing those goals.

• Re-Evaluate Your Spending Habits
Unnecessary purchases can also affect your business. Assess your spending habits and if you find out that you made purchases on impulse, try implementing new measures so you can prevent unnecessary spending. You may also speak to your bookkeeper for recommendations. With these simple changes, your business can make a difference.

Business Fraud Prevention

Small and big businesses alike are vulnerable to fraud. Blank cheques and fake invoices are evidences of fraud.

As a business owner, the first step to preventing fraud starts with knowing the methods employees use to execute a fraudulent activity. Stealing can be done in many ways and one of which is by placing inventory in garbage bins as a way of hiding stolen objects. Employees can resort to this extreme and desperate measure to steal.

Another cause for concern is when you see a bank statement addressed for a friend or a bookkeeper, but not your vendor. Sure you can consider one mistake as due to incompetence, but if it happens habitually, you know that something is cooking.

Ways Fraud is Committed

A business owner may think that bookkeepers just do not know what they are doing, but there are telltale signs that you should look out for to determine if there really is a case of fraud. If a bookkeeper takes time off, and cannot deliver monthly reports, you know that you need to conduct an investigation. It is very unlikely for bookkeepers to not have the ability to match accounts receivable and accounts payable to the balance sheet considering it is their job.

Not generating an updated financial report raises questions because this is one of the important tasks that a bookkeeper should carry out regularly. There can be some lame excuses such as faulty software or the lack of resources to reconcile a bank account.

How to prevent fraud?

Bookkeepers must be given deadlines as a way of preventing unusual activities. Reports must be delivered to you after month-end and reviews must be done on a monthly basis.

It would also be helpful if you separate bookkeeping duties of your business. Assign a person to enter the bills, and another for paying the bills. There should also be an evidence of financial transactions made. For instance, employees should attach cheques to invoices so you can monitor where the money is spent. Do not forget to sign all your checks as well.

You will also have to perform physical inventory checks. It is important for employees to be aware that you are monitoring transactions. Ask questions and get regular updates from your bookkeeper. It is easy to overlook these things if you remain complacent about your business activities. Do not wait for the time when you have to look over your shoulder as paranoia has already feasted upon you. If you suspect that your employees are engaging in fraudulent activity, act swiftly before matters could get worse.

5 Things Bookkeeping Can Do To Your Business

For a small business, bookkeeping may be considered unnecessary unless you want something done immediately. This is why many business owners have missed out on realising the benefits that good bookkeeping provides. If you are not sure whether hiring a bookkeeper is a good idea, think about your cash flow. Since it is the lifeblood of your business, you cannot go on with any business ventures without it. It is important that you have a healthy understanding of your cash so you will know the steps to take in increasing your cash flow. Here’s why hiring a bookkeeper is beneficial to your business.

1. Tax season becomes simpler

For most business owners, tax season can be a stressful time because it involves preparing reports. You will pay the price for not hiring a bookkeeper during tax season because the reports demand accuracy. It is important that you are equipped with correct financial reports and this will only happen if you have an accountant or bookkeeper to provide what you need easily and quickly.

2. You can make informed decisions

You will be unsure of the road you are going to take if you have no idea about the strength of your business. With good bookkeeping, you will be able to obtain real time information so you can make informed decisions especially when it comes to grabbing an investment opportunity.

3. You can think strategically

It is difficult to create a strategic plan if you do not have the ability to think beyond this week. A good bookkeeper can help you think strategically so you can prepare for the things ahead.

4. You will understand what is happening with your business

When your books are not properly organised, there will be essential things that remain unknown to you. You may have cash coming in but if you have no idea of what is happening, the future of your business will also be blurry. Your bookkeeper gives you an extra set of eyes so you will be able to identify if there is any fraudulent activity  or potential opportunities to watch out for.

5. You get the right results

Even if you are using bookkeeping software, there can still be some aspects of bookkeeping that you need to leave to the expert: your bookkeeper. You can get the results you want as your bookkeeper can dig deeper into essential journal entries, bank reconciliations and chart of accounts. The results go as planned because your bookkeeper ensures that you are in the right direction.

5 Bookkeeping Habits That Make Business Thrive

Your finances must be regularly tracked if you are running a business. Otherwise, you can put your business at serious risk. If you want your business to survive and thrive, it is imperative that you have good bookkeeping habits.

1. Have a professional prepare your tax returns

Business owners are not only focused on one aspect of managing the business. This is why most savvy entrepreneurs choose to outsource work to ensure accurate results. If you have a trained financial eye, bookkeeping processes can be easily monitored. If there are discrepancies, bookkeeping experts can correct or improve the data before it reaches you. Preparing tax returns on your own may not be a good idea. It is because there are technicalities that you might not be fully aware of.

2. Document bookkeeping processes

It is also a good habit to document your processes. This way, you will be able to gain a better understanding how bookkeeping processes should run. As your business grows, you will also be able to prevent confusion as everyone is in the same direction. Good bookkeeping should be consistent.

3. Choose the right software

Never skimp on the bookkeeping program you are going to use because it can help you get things done in an accurate and timely manner. In choosing the right software, you should focus on your business needs. Sophisticated software that is not aligned with your business objectives will be a waste of money. Ask for recommendations and get ample training before deploying the new system.

4. Keep an eye on your reports

Although you need to hire a bookkeeper and accountant for your financial reports, this does not necessarily mean you should go entirely hands off. You still have to keep yourself involved by reviewing reports and checking what is going on with your business. You need to have basic understanding of business numbers including trend in expenses, profit, profit per customer, accounts receivable and many others. Knowing the basics of accounting can help you monitor the health of your business.

5. Keep receipts

You need to know how much you are spending on your business and keeping receipts should be considered a habit. If you are not mindful with your cash expenses, it is easy to get confused with business numbers. Receipts serve as your backup statement. Some business owners may even keep a notebook to log cash expenses they incur. You can also download accounting app which enables you to snap pictures of your receipts so you do not have to keep the paper copies.