The Importance Of Keeping Receipts

A receipt is just a small piece of paper where your purchases or transactions are reflected. Most of the time, these receipts find themselves inside the trash can because business owners prefer to take a mental note of the
transactions instead of diligently filing these receipts. While one purchase is easy to remember, you can get sidetracked by other obligations. That single purchase can easily slip your mind when you have many things to take care of.

As they say, you will never know what you got until it is gone. The same is true with keeping receipts. They may not seem to be valuable, but they are part and parcel of record-keeping. They play a part in monitoring your expenses. If you take the time to capture receipts paid with cash, it will be easy for you to know how much you are spending on a daily basis.

Capturing your business expenses is a daunting task unless you make it a habit to reconcile your bank account. One mistake that business owners make is mixing personal expenses with business expenses. This is a bad practice because it makes the monitoring process more difficult than you know. As your expenses increase, the process of assessing your spending habits becomes a challenge.

Keep in mind that the purchase includes GST and ignoring it can spell trouble for you. Miscalculating your expenses can also hurt your taxes in more ways than one. While the damage is reparable, you will need to pay for penalties and late fees. The payment for these fees are often taken from your cash flow. When your cash is spent unnecessarily, opportunities become limited.

Two ways to capture business expenses:

1. If you have paid your transactions by cash, be sure to collect receipts or even capture information. Using a smart phone app, you can take a photo of your receipts. This way, you will have an instant copy of every transaction you make. This is a smart habit for those who tend to forget keeping a record of receipts during lunch meetings and business travels. There are many apps you can download, which will enable you to snap a photo of receipts and send them in just a few taps.

2. Use your business account for paying business expenses. If you have made a purchase of your office supplies, never attempt to use your personal account for paying them. Pay for your purchases by transferring private funds into your business account. It is easy to monitor your expenses when you have your own business account.

Cash Flow Survival Tips For Small Business

A business cannot survive without a steady flow of cash. In spite of the profits it makes, the lack of cash flow can result in losing your business. Why is cash flow management important? How can business owners ensure that there is enough money for future investments and monthly expenses? Proper cash flow management is the secret to having a steady cash flow. Sure some businesses have secret sauce to ensure survival, but there are simple rules that are crucial to the survival of every company. If you manage your cash flow intelligently, you will be able to reduce error, plan for the future and manage your company’s spending habits. A few survival tips will not hurt:

Track, track, track

Handling your finances requires tracking everything so you will know what is coming in and what is going out. Simple oversights will result in losing track of your expenses. Tracking everything means you should monitor how much you are spending on company lunches and travels in real time. When you have a real-time view into cash flow, you will be able to have the ability to manage your cash flow efficiently.

Gain deeper understanding of your financial data

It is not enough that you generate a financial report because you should also understand whether or not your business is running smoothly. It is easy to misunderstand data unless you scratch beneath the surface. Got some questions? Ask your bookkeeper rather than assume that everything is doing perfectly fine. When information is outdated, the chances of making costly mistakes also increase. Make it a habit to consolidate your financial data to get accurate information. If you obtain financial information from multiple sources such as handwritten files, excel spreadsheets and some online tools, you can get confused in the long run.

Automate bookkeeping processes

Another reason your cash flow management is in chaos is due to manual bookkeeping processes. There are aspects of bookkeeping that you need to automate such as generating invoices. As your business begins to grow, it will be difficult for you to track clients who have and have not made payments. Automation bypasses the tedious process.

Evaluate spend

Are you doing good at spending? Do you always see to it that you renegotiate contracts and get a real-time view of your cash flow? If you want to drive growth, you need to know how to spot business trends. It is also necessary to formulate strategies that will improve your overall business performance. Costly mistakes can affect your business. However, if you are well-prepared, there is no other way to go but up.

What Can Virtual Bookkeepers Do For Your Small Business?

Technology has made it easy for many businesses to take care of the most essential task:bookkeeping. Many business owners dread preparing invoice and tracking expenses. However, when the time comes that you need to grow your business, you need a financial report to find out if your business is ready for expansion. Bookkeepers ensure the financial success of your business. Without a doubt, they make job much easier by avoiding bookkeeping in a shoebox. Aside from taking care of the financial aspect of your business, bookkeepers are also intended to provide sound advice when it comes to financial management.

One thing that concerns most business owners is the ability of workers to finish the task. Since bookkeeping demands time and accuracy, payroll management , invoice preparation and other critical bookkeeping tasks seem to be a challenge. This is why it is necessary to choose the bookkeeping software that will not only reduce time consuming processes but also streamline workflow.

With plenty of advance business technology options to choose from, it is difficult to determine the software that suits your business needs. There are some elements of bookkeeping that you must keep in mind so you can narrow down your selection.

Common features of bookkeeping software:

With the proliferation of virtual bookkeepers, more and more businesses have tapped into more advanced bookkeeping technology to stay relevant. Expense management requires regular monitoring so you will know if you still have enough cash flow to pay your bills or even to grow your business. Before you make a choice, you need to take the following features into account:

  • Data Integration: When essential data can be accessed by bookkeepers and business owners, delays are reduced and important work is done in a timely manner. With a seamless integration with the software of choice, you will be able to ensure that expense management is not overlooked. This feature must be part of your bookkeeping software package as it is essential to keep data available whenever, wherever.
  • Document Capture Capabilities:There are a number of ways you can obtain invoices, receipts and other important documents. They can be obtained from email, traditional mail and much more. Since keeping track of everything can be difficult, savvy business owners use their smartphone to capture essential information. The expense management software you should choose should have this mobile feature so it will be easier for you to snap a photo of bookkeeping documents.
  • Cloud technology: The need to remotely access key information is made possible by cloud technology. Aside from giving business owners peace of mind, software with cloud capabilities will also boost productivity. Documents and data are also available to review.

3 Factors To Consider When Choosing Cloud Service Provider

Big and small organisations consider choosing the right cloud provider to be a daunting task as there are different types of cloud services to choose from. If you are not accustomed to cloud technology, coming across various terms related to cloud computing can make the selection process more confusing. Before you dive into embracing cloud technology, it is important to understand their benefits, features and the type of cloud service you need for your business.

Different types of cloud service

These days you can choose from three cloud service models, all of which have their own advantages and similarities. these services are Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS).

SaaS uses an environment that enables multiple users to stay connected through the web. PaaS has the ability to create and test applications with the use of a hosted environment from a cloud service provider. IaaS involves the use of hardware services from a cloud provider.

Uptime

Aside from familiarising yourself with the different types of cloud service models, the percentage uptime or the cloud service level must also be taken into consideration. If a cloud service provider’s Service Level Agreement (SLA) is at 99.9%, this means they have a total of 44 minutes downtime on a monthly basis.

Cloud Deployment

The options you have for cloud deployment are also worth-exploring. Just like the cloud service models, the cloud deployment options will also depend on your needs. All of the options have their own merits. These options are public cloud, private cloud, virtual private cloud and hybrid cloud model.

Public cloud uses a web interface, but storage and application are made accessible to the general public.

Private cloud has cloud-computing capabilities that enable organisations to use their own firewall. This option is designed for business use.

Hybrid cloud offers the best of both worlds as you get to enjoy the affordability of public cloud and obtain greater peace of mind with the flexibility and high level of security of private cloud. The model uses cloud and on-premise platforms.

Virtual private cloud offers a multitenant cloud-hosting environment which allow businesses to separate resources. More often than not, virtual private cloud offers higher level of data security.

Choosing the right cloud service for your business can be tricky because of the numerous options to explore. Make sure you choose the cloud model and service that is aligned to your business needs. This way, you will be able to maximise the effectiveness of cloud technology when it comes to providing mobility, flexibility and security to your business.

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.

What Are The Basics In Starting A Business In Australia?

Starting a business can be both exciting and challenging. It involves a lot of preparations and for you to cross the finish line, you have to focus on your goal regardless of the demands and distractions. Since a myriad of requirements must be complied in running a business, creating a checklist ensures you do not miss out any essentials. Aside from marketing and product development, you also have to think about finance and other important issues involving your business. Here are the steps to setting your business right:

1. Determine the business structure that suits you.

Before you start a business, it is important to figure out the business structure, which is suitable to you. Whether you want to be a sole trader or in a partnership, trust or company identifying the business structure that works for you will help you weigh the pros and cons of each type.

2. Get your business registered.

Once you have chosen a business name, you need to get it registered before considering having letterheads, business cards, websites and logos. This is to ensure that the name is accepted by the Australian Securities and Investments Commission (ASIC). You will also have to decide whether or not your logo or business name should be registered as a trademark.

3. Secure an ABN

When you are registered to collect GST, you will need an Australian Business Number (ABN). This can be secured from Australian Business Register’s website. You will also need to apply for a Tax File Number (TFN) from the ATO if you are going to open a partnership.

4. Be familiar with PAYG withholding responsibilities

For employees to make PAYG payments, their salaries must have taxable amounts. Without familiarising yourself with PAYG, you will never know how the payments are deducted. It is also important to seek advice from your accountant to ensure your business meets its tax responsibilities.

5. Check permits, licenses and legal requirements

Your business cannot operate without securing national or local licenses. Aside from licenses, you will also have to check out the ATO’s fuel scheme information to find out if your business is eligible for fuel tax credits. Being familiar with the laws that apply to different products, services and businesses is also essential. You can check out Competition and Consumer Act or visit Australian Government Department of Industry to know your legal obligations. These resources are going to help you gain a deeper understanding about privacy laws, Australian consumer law and other legal responsibilities.

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.

5 Best Practices Every Business Owner Should Follow

The lack of proper bookkeeping system often results in facing a plethora of business-related problems such as improper tax filings and poor cash flow. If you are a small business owner, these problems can put your company at serious risk. For every business to thrive, good bookkeeping habits are essential. Here are 5 good habits that can protect your business and keep you in the right direction.

1. Choose the right software

When it comes to getting the software for your business, you should not skimp on the program or system you use. If you have a good system, your business will not only reduce manual tasks, but also get more tasks done. While you may be confused with all the options available to you, it is important to consider the software that meets your needs. There are programs loaded with features, but this does not mean you can use all of the features. It is also worth considering programs that are user-friendly.

2. Keep expense receipts

How will you know the amount of money you are spending on your business if you do not keep expense receipts? You may think it is just meager amount, but when the time comes that you need to pay your bills, you will realise that you do not have enough cash flow. You will to check your receipts and monthly statements so you will know how much you are actually spending. Receipts are essential as there are not backup statements.

3. Get help to prepare tax returns

Every business owner knows it is difficult to prepare tax returns as deductions need to be accurate. You need to be well-trained to ensure your bookkeeping process is correct and will not trigger ATO audit.

4. Avoid going “hands-off”

Although you may leave most of your bookkeeping task to a professional, it does not mean you should go entire hands-off. You will need to review reports so you will know what is going on with your business. You will also have to ask the right questions to your bookkeeper. You must also understand basic accounting and bookkeeping so you will have an idea about accounts receivable, trend in expenses and more.

5. Track receivables

Chasing clients can be a tedious task because you need to make sure that all of them have paid their invoices. You will also have to track the logs of your invoices and make sure you have updated the status of each. Tracking your receivables using some bookkeeping solutions will help you find out which invoices are late and unpaid.

Has Your Business Tried Cloud Accounting Software?

Dealing with bookkeeping can be stressful even for a small business owner. You need to ensure all aspects of your business are kept in check. However, you may still have other business obligations that you need to take care that bookkeeping becomes your lowest priority. It may not have a negative effect on your business, but habitual bookkeeping neglect can take its toll on your business. These days, switching over to cloud-based software is no longer a want but a need. This is because cloud technology enables business owners to streamline processes and increase productivity. Here are the known benefits of cloud technology for small business owners:

1. It generates real-time reports

If you want to get an up-to-date view of your business performance, you need real-time reports. Cloud software makes this possible by making reports accessible to you. If you are in a fast growing company, making informed decisions is essential and you cannot just make decisions without having an access to your financial data.

2. It keeps track of receivables

Generating invoice can be such a challenge when it is done manually. With the help of online invoicing, you can easily keep track of the clients and customers who owe you. There is no need wasting time tracking down late payers because you will be notified once they view your invoice.

3. It is mobile

So long as your device has an internet connection, you will be able to make use of cloud-based software anywhere at anytime. Wherever you are, you can check your balances, track expenses and much more.

4. It makes collaboration a breeze

Since cloud technology offers multi-user access, accountants and bookkeepers can work together. Everyone has access to your business files so you can ask questions and even get advice when you need it most. Your accountant will also have the ability to log in and even take a look at number so productive discussion of your financial health and business performance can be made.

5. It detects any sign of fraud

In the age of the paperless, it is no longer a challenge to detect any signs of fraudulent activity because it can be detected when you are using cloud software. If you see any suspicious transactions, you can always ask your bookkeeper or accountant about it. These transactions can be easily traced and monitored before they can negatively affect your business. Cloud software makes it easy for you to do this.

5 Reasons Small Business Needs Bookkeeping

Tracking expenses is essential to all businesses and hiring a bookkeeping service is one way to make this task much easier. However, for small businesses, bookkeepers are not a priority because of perceiving bookkeeping as an additional expense. If you rely on DIY bookkeeping, there will be more room for mistakes you may tend to overlook essential information. There are good reasons bookkeeping is a must for your small business:

1. Transactions are classified.

Accuracy is important when generating financial report and spending time keeping books must also be a priority. A bookkeeper is capable of entering and classifying transactions as part of your pre-tax planning. Bookkeepers will also check your books regularly so you will not worry about payments come tax time.

2. You save time.

There are many problems associated with DIY bookkeeping such as failing to focus on other more important areas of your business as you are stuck in entering transactions into your ledger. If you let bookkeeping professionals take care of this task, you can save yourself from spending too much time on keeping books. These professionals have a sound knowledge with bookkeeping software and you will not also miss other great opportunities.

3. Manage payroll easily.

Whether you are a sole trader or in a partnership, it is important to note that as your business grows there will be additional tasks that you need to handle and one of which is payroll management. This is one aspect of running your business that you should not ignore. It includes creating checkes and making sure that income taxes are deducted correctly. You cannot afford to make mistakes. This why hiring a bookkeeper is important when handling payroll.

4. Prevent paying bills late.

It is easy to overlook bills when you are busy. Paying your bills may be a simple task, but it is mostly one of the obligations often forgotten. It can result in major and costly consequences. If you hire a professional to remind you of upcoming payments, late payments will no longer cause problems and worries. You just need to give access to your online accounts so the bookkeeper can check statements and even make payments online.

5. Generate reports when you need them.

Many small business owners are not completely aware of their true financial state. This is because they do not have access to the financial reports. Bookkeepers must make reports available to business owners on a bi-weekly basis so business owners will know how their business is doing. Reports also provide an idea where business stands. Problems are also prevented when financial reports are regularly checked.