Effortless Bookkeeping Tips for Small Businesses

What sort of bookkeeper are you? If your system resembles a shoebox of faded, dog-eared receipts you might want to reconsider your set-up.

Not many business owners cite bookkeeping as a pleasurable part of the job. However, no matter what line of business you’re in, efficient bookkeeping is crucial to your success.

Tax law requires records be kept for a five-year minimum – if the ATO selects your operation for an audit, handing over a shoebox is unlikely to impress.

To save yourself less pain, in the long run, read on for an overview of what you should be filing.

Bookkeeping Documents You Need To Retain

  • Bank statements
  • Sales receipts
  • Expense invoices
  • Credit card statements
  • Employee wages, super, tax declarations and contracts
  • Vehicle Records
  • Lists of creditors and debtors
  • Asset Purchases

Effortless Bookkeeping for Small Businesses

Whether you prefer a digital system or the old-fashioned paper trail, easy retrieval of these documents should be your main aim.

Continuous recording, rather than a haphazard approach just before tax time, is more likely to guarantee efficiency.

  • Get organised: As mentioned before, organised bookkeeping not only looks better to the government but helps you keep track of the important stuff.
  • Separate your professional bookkeeping from personal finances: Muddling up your personal and professional finances is never the way to go. Your business books and your home financials cannot cross their streams (We’ve all seen ‘Ghostbusters’. We know how that ends).
  • Store physical hard copies of your books: While the cloud is the best and most secure place to store your records, it isn’t always the most reliable, especially when we sprinkle in the human element of forgetting codes and passwords.
  • Don’t try to hide mistakes: Making mistakes is human. We all do it. If an entry is not contemporaneous because it was forgotten, however, make this clear. It will save you a lot of time and hassle.
  • Know When to Hire a Bookkeeper: Hiring someone qualified for this task can ensure you never accidentally break the law, lose important documentation, or make any costly accounting errors.

If you found this article on bookkeeping insightful, check out our other article: How To Reduce Small Business Debt

The Importance of Bookkeeping for Small Businesses

A current database is the most useful tool a business has in planning and keeping up with your business’s financial needs.

Unfortunately many, if not most, business managers fail to give bookkeeping the time and thoroughness it needs to affect their business in a positive way. Rather, neglecting this task often leads to chaotic books, and can spell disaster come tax time.

Proper bookkeeping provides your small business with a real advantage in the market, in a number of ways.

  • Helps manage accounts, interests, taxes and working costs effectively.
  • Act as a resource for new strategies.
  • Data about the success of your past business efforts.
  • Helps in finding solutions for business issues.
  • Information about customer service and employee efficiency.
  • Helps in monitoring company growth rate and profit.
  • How your business performs against your competitors.
  • Reveals hidden and unexpected costs.

Today’s database management and bookkeeping solutions make bookkeeping a simple task.

These systems help in digitising all of the business’s data and arrange and keep them in most convenient manner. With effective bookkeeping software, you no longer require as much physical paperwork, large storage spaces or as much printer paper and ink.

The Best Bookkeeping System Software for Small Businesses?

Each business is different and as such, require different software programs to suit their bookkeeping needs. Your choice of bookkeeping software needs to tick a few boxes:

  • Invoicing & Quotes
  • Bank Reconciliation
  • Tracking Inventory
  • Mobile Accessibility
  • Employee Wage Payments
  • Process Purchase Orders
  • Claim Expenses
  • Entering Bills Into The System

Taking these factors into consideration, we’ve compiled a list of the best small business bookkeeping software for 2018:

Xero

– Mac users often grapple software that feels less capable than its Windows counterpart. Xero’s cloud-based accounting software is available for both PC and Mac. It’s a full-featured solution that doesn’t compromise on features for Macs.

Xero helps you save time and streamline accounting by automating tasks and integrating with 600+ apps.

– It comes with 24/7 active email, live chat and phone support at no extra cost.

Intuit QuickBooks Online

Intuit QuickBooks Online is suited for all types of small businesses. They have features that suit freelancers, restaurant owners, service providers and much more.

– If you’re starting up or moving out, expanding into the market or digging deeper, QuickBooks Online has every feature to meet your small business’s bookkeeping needs.

Zoho Books

– Small businesses (Often called microbusinesses) need simple accounting software.

Zoho Books offers both the basic and advanced features microbusinesses need, with options to scale up as you do.

FreshBooks

– Invoicing with FreshBooks’ accounting software products is incredibly easy. It’s intuitive and allows you to customise every aspect of your invoicing.

– You can set automatic payment reminders and late fees.

FreshBooks connects to your bank, tracks times and helps manage your projects.

Wave Financial

Not all small businesses require extra features provided with paid accounting services.

Wave Financial offers a comprehensive set of accounting features and cloud-based software specifically designed for small and micro businesses, free of charge.

At the end of the day, bookkeeping is a time-consuming process. But it must be done for the good of your business and your legal standing with the government.

Ultimately, we believe the small business bookkeeping software offered by Xero is the best and most intuitive for your business needs.

If you’re interested in switching to Xero, or interested in Xero’s capabilities, give this article a read:  Xero Converts Loving It.

When running a small business, one of the most challenging tasks is managing your bookkeeping. This issue can be amplified if your small business accounting software is not up to the task. Some software seems to make an already confusing job even more so. And when trying to run your small business, confusion is the last thing you need.

Xero is a cloud-based accounting software package that offers all the basic and advanced features you need in an easy-to-understand format. If you want to know more about what makes Xero a hands-down choice for small business accounting, see why we chose Xero.

Keeping up with your small business’s finances requires some research if you’re doing it yourself. If you hire a bookkeeping service, however, much of the tedious and daunting work is simplified.

Integrating a piece of accounting software into your day to day processes can significantly aid in your bookkeeping efforts also.

Effortless bookkeeping for your small business requires you to balance a number of different and interworking factors to be efficient. With organisation at the top of the list.

SMSF Guide | Self-Managed Super Funds | SMSF Advisers Perth

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