Why Is Time Essential To Every Business?

If you want to keep track of the time you spent on a particular task, time tracking is the way to go. Not only does it provide you greater peace of mind when it comes to estimating how much time you are actually spending on a specific task, you will also have the ability to adjust the pace in case you think your progress slows down. Time tracking is not just about getting the job done as fast as you can, it is also about accomplishing your projects in a timely and efficient manner.  A time tracker is beneficial to both clients and employees because aside from its effective way of tracking the amount of time spent on various projects, time tracking applications are also downloadable regardless of the device you have.

Reasons time tracking is a must:

•    You get accurate information of the time you spent.

Have you ever experienced losing track of time as you were engrossed in accomplishing a task assigned to you? As a bookkeeper, there are instances when you need to get the job done quickly so you can accommodate other tasks at hand. While most bookkeepers are compelled with multi-tasking, quality usually takes a backseat. With time tracking, you will be able to know the amount of time you need to finish a specific task without sacrificing quality. When you are keeping track of time, you can also pay attention to other crucial tasks such as invoicing, outsourcing and quoting. When you have an accurate account of your time, you will also improve your overall efficiency.

•    You become more efficient as an employee.

How many times have you caught yourself getting side tracked by social networking sites while letting an important task wait? When you are not focused on your task, you find it easy to check out post updates without realising that you are already wasting your time. However, if you have a time-tracker, you can stay focused on your task and set aside less important matters such as unnecessary web browsing. You can greatly improve your efficiency this way. You can also check actual time instead of ideal time. When you keep on challenging yourself, you are more likely to complete the task efficiently.

•    It is easy to outsource task to somebody else.

If you can easily identify where your time is allocated, you can determine whether or not you need to outsource the task to others. If you used to have difficulties completing certain tasks because you are unsure of the time you allocate, a time tracker can help you resolve such difficulties. You can also evaluate the time spent and determine if you are working efficiently. You can also use time tracking as a guide for booking other people to get the job done.

•    It reveals hidden time.

When you make it a habit to track your time, authenticity and integrity are ensured for both employees and client. No time will go unnoticed and you prevent multiple revisions and intensive project management.

Why Poor Bookkeeping Can Wreak Havoc On Your Business

When it comes to business management, your business’ financial aspect requires attention and while bookkeeping and accounting fees are quite high these days, ensuring quality is going to be the best practice to follow to avoid experiencing poor bookkeeping. Just imagine operating your business without paying attention to your financial activities. You had high hopes that your cashflow is still intact but when you received a letter from the ATO reminding you of your delayed or non-payment of GST and PAYG, everything will surely sink in that you need to recheck your bookkeeping task.

You worst fear has finally come true as the ATO forwarded the letter to your bank informing them of your non-payment. It was too much to take and you are well-aware of what is going to happen next. You panic at the thought of your bank receiving the letter from the ATO. You are restlessly waiting for the bank manager to call and demand of a good explanation for your non-payment.

Being in the business requires you to keep watch of your cashflow from a bird’s eye view. For the most part, business owners rely on bookkeepers when it comes to ensuring that their financial activity is kept in check. However, your business is doomed to fail if you do not take an active participation in the process of checking your financial statement. As a result of non-payment of GST and PAYG obligations, the ATO is left with no choice but to garnish the company’s bank account.

The sad truth about mismanaging a business is the failure to pay attention to their operating expenses and wages bill. It seems too easy to request the ATO to defer payments, but if this already becomes a habit, it is definitely difficult to catch up. Once a business is in financial distress, making a payment of debts is a challenge. If paying debts is not definite, insolvency is not far from happening and bankruptcy is inevitable.

Even the hardest working people are not immune to financial stress and there are things beyond a business owner’s control. If you have a business partner and he is not doing his part in managing the business, it can also take its toll on your business.

This scenario can still be avoided so long as essential questions are truthfully answered:

• Can you still meet the contractor’s bill and payroll?

• Are you making timely GST and superannuation payments?

Timely management reports should be prepared by your bookkeeper so you will be able to keep watch of your business. Bookkeepers should meet the following obligations for a cost effective way of handling your business:

• Create a system so invoices go out promptly and reminder notices are sent effectively to avoid falling behind payment schedule.

• Prepare a system that has the ability to highlight late payers once due dates are triggered.

• Terms on invoice should also be set up so it will be easy for you to find out about your collection costs.

As a business owner, it is also your responsibility to call the bank manager before he calls you, give the ATO a call, arrange payment plan that you can follow, prepare budget and reduce head-count if it is considered necessary.

Three Bookkeeping Documents Every Business Owner Should Know

Have you ever wondered why your bookkeeping woes just don’t seem to end? There might be one aspect of your business that you may have forgotten to pay serious attention to. Although preparing financial reports is your bookkeeper’s job, it is still necessary that you understand the importance of various bookkeeping documents. If those statements leave you confused whenever your bookkeeper presents them, it is a clear sign that you need to seriously consider gaining basic understanding of the documents. You may not be as well-versed as your bookkeeper, but having an idea about the purpose and how you can use them will help you understand the financial information that your bookkeeper gives you.

Cash Flow Statement

The Cash Flow Statement is intended for presenting the movement of your assets. The main purpose of the statement is to demonstrate which direction your assets are going. There are three movements that the statement is broken down into: operating, investing and financing activities. Operating activities refer to the activities that the business performs. Making a sale is an example of operating activities. The investing activities refer to the purchase and sale of various assets and an example is buying a new location. Financing activities include paying or generating debt.

Income Statement

The Income Statement provides a summary of your business’s profits and losses for the current period. It also shows the business’s income and the sales revenue. You can also find the expenses of your business such as the wages and rent in the income statement. In order to find the net profit or net loss, the bookkeeper has to find the difference between the expenses and the income. Business owners often expect to find a net profit on this type of statement.
If bookkeepers want to provide advice or recommendations, this is the statement they will get references from. The bookkeeper will obtain information about the status of your business and the steps to take to make it more profitable. As a business owner, you will be able to know whether or not your business is doing well.

Balance Sheets

The balance sheet is an important bookkeeping document because it shows the amount of money you currently have. However, you should keep in mind that your specific investments are not taken into account. Compared to most accounting or bookkeeping statements that focus on every financial detail, the balance sheets only show the business’s overall success.

The balance sheets are also referred to as statements of financial position and they are considered bookkeeping’s building block. If there are additional statements that need to be created, the balance sheets are going to be essential so final conclusions can be drawn. In fact, other statements obtain information from the balance sheets.

More often than not, there are three essential elements that can be found in these balance sheets: liabilities, assets and equity. The liabilities refer to the items that your business owes such as loans. Assets include business-controlled items such as machinery and cash. The equity refers to the capital left after the assets have been used to settle liabilities. The balance statement also shows that the business’s assets are equal to the sum of both the equity and liabilities.

Bad Bookkeeping Habits And Their Impact On Your Business

Habitual neglect of bookkeeping duties eventually affect the overall performance and condition of your business. One neglect can form into a habit, which triggers red flag.

1. Not Setting Due Dates and Deadlines

Every business needs to get detailed information about monthly reports. If your bookkeeping is late and inaccurate, the negative result will no longer come as a surprise because you failed to set due dates and deadlines. You need to know when reports will be delivered. You do not want to take a wild guess which direction your business is going don’t you? Plus, ATO can chase you for all your late payments.

2. Not Organising Receipts

A piece of paper can turn into one of your worst nightmares when the ATO comes knocking on your door. It is highly recommended that you organise and keep receipts for up to 5 years. If you have stacks of invoices on your desk, not knowing what to make of them, you need to start including ‘organise’ in your vocabulary.

3. Not Managing Payroll Taxes

The world of payroll management can be complicated that you might find yourself completely alienated by the process. Get someone to manage your payroll taxes to spare yourself form the headache of dealing with it. However, do not go totally hands-off as you still need to check if your bookkeeper is doing things right.

4. Skipping Regular Bookkeeping Training

The only thing constant in this world is change and keeping up with the changes in technology is the only way to stay relevant. Your bookkeeper may still be spending hours burying their heads in stacks of papers when there are easier and faster techniques to run a report. It could have been done better, had you thought about giving your bookkeeper a regular training on the latest bookkeeping regulations and cloud software.

5. Not Integrating Data

What better way to manage data than utilising cloud technology? Business owners are plagued by financial reports because the process that running them entails can be quite tiring. This is where data synchronisation becomes necessary because it reduces error and even improve your time management. What’s not to love?

6. Not Standardising Monthly Financial Reports

The reason for standardising your financial report processes every month is to ensure that you run the same report  on a monthly basis. Standardised reports ensure you track your financial data effectively.

7. Not Keeping Track of the Invoices You Sent

Your business may generate profit, but without a steady flow of cash, the money in your business is still not enough to shoulder monthly expenses. You should know when you will get paid because monthly expenses do not have a ‘pause’ button. You will continue to pay for them regardless of your financial condition.

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.

Why Automated Bookkeeping Is A Good Idea?

Have you ever wondered why some businesses fail? It can be due to poor financial health, which is known to be a major contributor to small business failures.

If your bookkeeper is not performing the tasks efficiently, inefficiency can impact your financial health. In the digital era, small business owners have the option to make bookkeeping task easier through automation. If you need to check an updated financial report, automation will make information available in real time.

Why should a small business owner automate?

Manual tasks are time-consuming and repetitive. They also demand greater workforce and skilled manpower. However, even trained manpower does not guarantee an error-free report. Automation helps your business put things in proper perspective. The process is capable of correcting bookkeeping mistakes, which are committed repeatedly due to constant human interaction. Automation helps you to avoid these 5 mistakes:

1. Failing to track expenses regularly

Every business transaction must be recorded for a good reason: your business is dependent on your cash flow. Whether you are tracking sales or expenses, it is important that every transaction made is recorded. If you miss tracking your expenses diligently, you may end up covering expenses using your own funds.

2. Do-it-yourself bookkeeping

For a business that is just starting up, hiring a trained and experienced bookkeeper will only incur higher costs. However, a bookkeeper who is equipped with knowledge in using automated tools can ensure that your books are updated and your expenses tracked.

3. Not reconciling accounts

Business owners cannot afford to miss this task because it is a critical step in every bookkeeping process. A small bookkeeping error can snowball into larger mistakes if your bookkeeper does not pay heed to this process. Automation reconciles business books with card and bank accounts so you will know if there are discrepancies on the report.

4. Committing fraud

A business can lose vast amounts of money due to fraud. Fraudulent activities can be deterred if human interaction is reduced. Automation has a huge impact on the profitability of your business because it reduces dependency on manpower. As a result, you are also reducing the chances of committing fraud. Automation can easily spot discrepancies or incorrect details on your financial report.

5. Losing track of cash flow

Whether you want to invest or grow your business, the decision you make will depend on your cash flow. Every business should manage cash flow because it is also utilised for paying monthly expenses. A profitable business may not be considered successful without a steady flow of cash. Automated bookkeeping provides updated records of balance and withdrawn funds so you will have an overview of your cash flow.

Simple Steps To Prevent Missing Tax Filing Deadline

Getting all the tax details in order can be a difficult tasks if the tax return deadline is quickly approaching.

However, this is not an excuse to miss the deadline because it can result in incurring penalties. Following great practices can help you file your tax return in a timely fashion. It only takes 5 steps to ensure you do not miss the tax filing deadline.

1. Correct discrepancies on your tax statements

Incorrect statements may be one of the reasons you miss tax filing deadline. You can still do something about these discrepancies by putting some pressure on your bookkeeper to send the documents you need or correct tax statement errors. Your tax documents must be available before the deadline to ensure you file your taxes in a timely manner.

2. File your tax return online

Since you now have the option to file online, take advantage of the opportunity to file your tax retun right away. Once you file your tax return, it will be processed within 24 hours.

3. Submit an extension

File an extension to prevent filing an amended return. The extension allows you to buy some  time so you can deal with your tax statement. If you have enough time to check your tax statement, it will be easier for you to get your taxes filed correctly. This is a great option for those who cannot track down corrected tax forms. However, you still have to keep in mind that if you owe any tax, you will still have to pay the estimated balance on the required date.

4. Pay as much of the balance as possible

Keep your penalty charges and extra fees to a minimum by paying as much of the tax balance as possible. You can also apply for an installment agreement to pay the remaining balance. If your application for installment agreement is approved, you will no longer have to worry about paying interest charges and excess fees.

Some business owners also choose to pay the tax balance with a credit card. This option saves time and money as you do not have to pay for high interest rates and fees that the ATO charges.

5. Create a system

If you do not want to get caught by the same cycle of delayed tax payments, be sure to consider setting up a system for next year. A good tax system prevents delays and minimises stress. Timely filing of tax return gives you peace of mind as you no longer have to worry about paying for penalties.

Basic Bookkeeping Tasks With Powerful Impact On Your Business

If your business is taking shape, the next thing to think about to ensure that the business is in the right direction, is to keep records accurate and up-to-date.

Not only are these considered a legal requirement, but one of the good practices to follow so you can manage your business effectively. You should keep track of your expenses, sales, salaries and bank transactions. While this may really sound complicated for those who are starting a new business, it can be quite manageable once you develop good bookkeeping habits.

Should you hire a bookkeeper or do the tasks yourself?

It might be tempting to do simple bookkeeping tasks yourself as this enables you to save money. However, if you want to achieve your long-term goals, it will be much wiser to consider hiring a bookkeeper.

There are bookkeeping tasks that can get more complicated than you think especially if it involves tax deductions. The ATO is very particular with the figures and inaccurate details can result in incurring penalties. If you are concerned about the cost of hiring a bookkeeping professional, think about the benefits.

The benefits of hiring a bookkeeper

You may not appreciate it at first , but as your business grows, you become busy as well taking care of other aspects of your business. This results in losing track of the financial aspect of your business. A bookkeeper ensures that your financials are in good shape by doing the following:

Checks your cash position
A bookkeeper checks if you have enough cash to grow your business or invest. They provide you a summary of your expenses so you will know whether or not you have enough to spend.

Prepares and sends invoices
Preparing invoices can take a large chunk of your time. Since it is a time-consuming process, you need someone to do these tasks for you so a steady flow of cash will come into your business.

Records your transactions
A bookkeeper is also responsible for recording transactions using bookkeeping software or an Excel. The transactions include money coming in from clients and money paid to suppliers, employees and others.

Review your cash flow
It is also important to check your cash flow position to ensure that you still have enough cash for the coming weeks or months. A bookkeeper takes care of this task.

A bookkeeper takes care of reviewing payment due dates, filing documents and receipts running your payroll, reviewing your incoming payments, checking your bank statements and much more. Hiring a bookkeeper creates peace of mind to business owners  by allowing you to focus on other areas of your business.

How To Efficiently Move Your Business To The Cloud

Cloud solutions provide better mobility and easier collaboration.

Moving your business to the cloud can change the way you work. Aside from automating some repetitive and time-consuming tasks, collaborating with clients will also be easier. In the digital age, you need to adopt the changes in technology as they enable you to thrive in the long term.

Although cloud solutions may be completely new to you especially if you have been used to a traditional bookkeeping practice, the mere fact that you can boost productivity and get things done are great reasons for making the switch. When it comes to embracing cloud solutions, it is important that everyone in your workplace gets used to an online environment. Adoption should start with knowing what a cloud solution really is.

What is cloud solution?

Almost everyone has tapped into cloud technology. You might already be using it without realising it. Some examples of cloud technology include ShareFile, Dropbox and Microsoft Office 365. These systems allow you to access your data anytime, anywhere and from any device.

Cloud solutions for bookkeepers work in a similar way. You can even think of it as normal bookkeeping software except that the data is stored securely. Cloud technology uses cloud storage so you can maintain access to the data in the event your computer crashes. Whether you wish to access the data from a laptop or a smartphone, cloud technology will provide you access.

1. Hands-on experience is your best teacher

You will never know how cloud technology works unless you decide to learn the ropes. Sure, it can be challenging considering the fact that you came from a traditional environment, but this does not mean you will remain alienated by cloud technology. Most cloud software providers offer a free trial. Ask yourself about the difference between traditional and cloud-based bookkeeping. Find out if you can really do things in a different way. Knowing the plus points of cloud solutions will help you ease your way into using it and understand its benefits.

2. Introduce it to employees

Once you have fully embraced cloud technology, the next step to take is to roll it out to your employees. However, you have to keep in mind that not all employees will be ready for the migration process. Provide training to make employees as comfortable as possible with the changes.

Remember that learning does not take place overnight, but this doe s not mean you cannot succeed in adopting cloud technology, you just need to keep an open mind.

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.