The following must-know tips will help you transform the mess that can be receipts and invoices into a streamlined system that improves transparency and helps you better understand your business’s financial state.
Understanding cash flow is crucial to your business’s success, so read through the following accounting tips and let’s get your books in order!
1. Keep your receipts (and keep them organised…)
The truth about receipts is that they are annoying. We find them everywhere: in handbags when you bought that new quilt cover and in plastic bags from that last supermarket visit. In fact, we’ve learnt to quickly say “No” even before the retail assistant asks if we need a copy of the receipt.
From a business point of view, though, receipts are crucial.
Think of it this way:
Your logbooks are the record of spend, but your receipts are the proof.
The best tip we can give when it comes to organising receipts is to record the purchase ASAP: taking a few moments several times a week is easier than spending hours at the end of the financial year wondering the purpose of that Thursday lunch back in August. There are ton of smartphone apps that can help you quickly snap, store, and record your receipts.
Dedicate an hour a week to record your receipts.
2. Create a spending / output budget
A new business might take a little bit of time creating a realistic budget that matches the level of business they’re receiving, but a more established business should have an idea of the standard cash inputs and outputs in a typical month, as well as their goals.
You might have predictable peaks and troughs throughout the year, as well as periodic costs.
You should look at your monthly:
- Overhead costs
- One-off / sporadic spend
Take advantage of profit and loss reporting in MYOB’s accounting system.
3. Keep it separate
We mean it!
Keep business and personal transactions separate, keep cash in separate accounts and use separate credit cards.
Accidentally charged that Saturday night Uber to your business card? Hey, it happens, but it’s a bad habit to fall into.
If you’re going to do it right, you need to be prepared to take the time to record the transaction correctly. You’ll forget, and purchases will fall through the cracks. A few months later, your transactions are a mess. Save yourself the wasted time and stress by keeping it separate – no excuses.
4. Choose cloud accounting
Anywhere-anytime access is the major attraction of cloud-based accounting software. In the cloud, you pay for a subscription to online software rather than applications that you need to install and run from your computer. Cloud software immediately removes the need to manage and maintain on-site infrastructure.
Submit receipts and check balances within seconds wherever you are through clever and modern apps via your smartphone and enjoy a paperless accounting method.’
Cloud software is suitable for all industries and business types.
Cloud accounting reduces the burden of saving paper receipts.
5. Enforce strict payment due dates from clients
A lot of work is coming in and you’re currently really pleased with the state of business. But the numbers don’t really count until you can clearly see them in your bank account. Letting clients slip behind on their payments can ruin your monthly profit goals while it also lets them fall into an unfavourable habit.
6. Engage the help of a bookkeeper
Of course we’d advise this tip, being bookkeepers ourselves, but it’s also a good opportunity to remind you of the benefits you and your business can reap with the support of a professional MYOB bookkeeper in Melbourne.
Without a bookkeeper, you not only spend time working on your books rather than running your business, but you can also suffer the following:
- Missing out on tax breaks
- A mistake (innocent or otherwise) can land you in hot water with the ATO
- Accounting errors that distort your finances
- Falling behind on invoicing and accounting
- Blunders that can take hours to rectify
A bookkeeper’s work can also lessen the cost and time required by your own accountant as it is the bookkeeper who helps prepare all the work.
Accounting is something that’s crucial from your first week in business and beyond. Get it right from day one. Isn’t it time you maximised your business accounts? Contact Maximum Business Solutions today or call us now: 9589 5488.