Keeping your books accurate and reliable would build a strong foundation not just for your tax returns but also provides a sneak peek into your business’ financial state. So Booksmart Accountants have tried to put together some essential tips to make your bookkeeping experience as a business owner more manageable along with running a business:

Organise your records daily

Organisation, as a skill might sound pretty mundane but should definitely be followed as daily ritual. Organising your records daily, throughout the year would drastically reduce stress during tax time. Collect and organise your receipts and record equipment purchases. Make sure that you have documented the income received categorically as cash, credit cards, PayPal and other income receiving methods.

Conduct a regular self-audit to review your finances

Regular self-audits will help you to review your finances and also help in resolving any errors early on. Self-audits will help you to keep track of your books, identify errors and ensure that is no room for mistakes with the money recorded in the books is what is in the bank.

Make books a priority

If you have recently started a new business, you would surely have a lot on your platter and bookkeeping is probably not the first task you would want to deal with. However, it is crucial to make bookkeeping a priority as it will be extremely beneficial in the long run. A control on your book records will give you a control over the whole financial situation of your business as you would know where every cent is spent.

Separate personal and business accounts

Keeping your personal and business accounts separate would help you to save a lot of time. When you have both personal and business accounts together, you have to first spend time on segregating the expenses and this can lead to inaccuracy and discrepancy in bookkeeping.

If you need further assistance with bookkeeping, contact us at 1300 300 106.

Zero-Based budgeting, also known as ZBB, was a popular method of budgeting in the 1970s and it has slowly started to regain its popularity in organizations and businesses. So what makes Zero-based budgeting different to traditional budgeting? Zero-based budgeting starts budgeting from scratch for every new period. ZBB method assumes that nothing was spent before. Every activity and resources needed for running an organization is critically analysed and has to be justified. Although time-consuming in comparison to traditional budgeting, ZBB ensures that the “needs” and “wants” are separated, and disregards the previous practices of how the resources are managed, even if it has been practiced for several years. One technically starts with a blank sheet of paper and a zero base.

ZBB is a useful way to improve resource efficiency as unneeded expenses are significantly reduced and also simplifies the management process. The expenses are strategically aligned with the planned target for a specific activity and the overall vision of the organization. Zero-based budgeting also helps to re-envision the business more frequently as each activity and resources are evaluated to meet the clear vision and cost target. The various methods of performing an activity should be considered to improve its performance. At which level should the activity be performed and at which frequency should it be completed? How would it significantly improve the running of the business? Would the efficiency improve significantly if the activity is outsourced, or if automated? The budgets are reset repeatedly, the organization is redesigned with employee levels examined regularly and finally, an implementation plan is drawn for the new period to maximize the overall efficiency and increase competitiveness.

Zero-based budgeting is definitely a step-by-step, detail-oriented approach which optimizes cost management and ensures that an organization never runs out of budget because of unnecessary spending! Why not try zero-based budgeting for your new business today? BookSmart Accountants can provide further guidance to help you reap benefits from this budgeting method.

Call us at 1300 300 106 to discuss more.

Most of us have been acquainted with cloud-based technology such as Google Drive and Dropbox and understand that how handy it could prove to be for mass-handling of information when you want it shared amongst a set of team members. Cloud accounting is no stranger too.Software is used to send information and common data to the “cloud”, wherein it is processed and sent back to the users.

With many business owners now switching to cloud accounting, the major benefit from this cloud-based accounting system has been realized as that of freedom from installing and maintaining individually installed software on different systems. Moreover, businesses with multiple branches and remote offices in distant locations can utilize this technology by use and access of same software version with same data within its own organization or in collaboration with other organizations.

As compared to on-site accounting, cloud accounting provides more flexibility in terms of accessibility as data can be accessed from any device just with an internet connection and of course an account and its password. Apart from access feasibility, cloud accounting gathers information from different users and updates financial database automatically. Thus, it also eases the reporting of real-time financial information that would be visible throughout the organization.

In terms of safety and security concerns, cloud accounting provides a better method of accounting. In case of theft or loss of company laptops and computers, the companies are threatened by theft of financial information as well. In contrast to that, cloud accounting leaves no trace of financial information on the devices. Information access is password protected and encrypted. Thus, even in case of stolen laptops, it is highly unlikely to know the password to this encrypted database. Each individual that shares this information within an organization through cloud accounting software is provided access through a unique password. Thus, no more usage of USBs, flash drives and hard drives that could be easily stolen or lost!

Whether you’re in business, or simply want to track your family budget clearly and efficiently, cloud based accounting software is affordable, convenient and easy-to-use.Booksmart Accountants understand the importance and confidentiality of information and data handled within the organization and thus, we provide secured cloud accounting to small businesses and even to individuals looking to handle their family budgets.

Double-entry bookkeeping is just another contribution by the Italians to this world. Luca Pacioli, known as the ‘father of bookkeeping and accounting’ has simplified and added value to the field of bookkeeping through his double-entry bookkeeping system. Double-entry bookkeeping system records one financial transaction in two separate journals and abides by the following equation:

Assets= Liabilities + Stakeholders equity

The two changes caused in the financial transaction in every business- credit and debit transactions are recorded in at least two accounts. This sounds fairly simple, but you must be wondering, why should you make the switch? How would it be really beneficial to your business?

Well, here is a list of reasons to make the switch to this bookkeeping system:

  • Double-entry bookkeeping records detailed information of all the assets of a business and allows transparency in the financial position of the business, at any given time. This helps in creating operational budgets.
  • Since each transaction is recorded two times and in separate areas, no important data is ever omitted.
  • The separate journals for credit and debit transaction make it easier to access assets and liabilities records for preparing balance sheets.
  • The occurrence of fraudulent is greatly minimized with a significant reduction in errors for checks and balances. This makes it difficult to exploit the accounts.
  • Double-entry bookkeeping system builds a strong foundation for preparing financial statements effectively. This system provides detailed information for balance sheet, cash flow statements, income statement and for other financial reports. The internal transactions are also easily tracked which helps in report at the end of the fiscal period.
  • The accuracy of bookkeeping records can be easily compared by comparing one journal entry with another entry for the same transaction. However, the accuracy of a transaction cannot be confirmed if the right amount is recorded in the wrong account journal!

 

What comes to your mind the first thing when the word ‘budget’ is mentioned during a casual conversation with a friend or colleague? Pain? No more vacations? No more shopping? If you are among the ones who relate budgeting to these thoughts, you are doing something wrong!

Budgeting isn’t about putting a stop on your lavish expenses. It is more about ‘measured expenses’. Budgeting must begin the moment one gets their first pay because it is through budgeting that one can be aware of where their money is going. Maintaining a personal budget is as much necessary as opening a bank account. Tracking your expenditure can be a tedious task but helps you keep a track of your weekly or monthly expenses to help you plan your savings. Thus against your idea of putting a stop on vacations, budgeting actually helps you in planning those vacations. Isn’t that such a great idea?!

People get surprised (or shocked!) when we add up their daily expenses, even if a dollar was spent on their morning coffee every day. These little expenses would surprise you as they make a big share of your expenses. Keeping a track of these little expenses help you understand your earnings vs expenditures and thereby help you in maintaining a steady bank balance and support your saving plans, so start today by recording your expenses on a daily basis. We’d suggest carrying a small notepad and start noting all the expenses just for a short period of time, say a month. By the end of this period, you’ll know your expenses and would be able to compare with your earnings. If you hate carrying around notepads, a notepad app in your phone could be handy and can be used anytime and at any place. Start budgeting today!

Personal budgeting can be an easy task and does not involve many complications. Simple Excel sheets and/or a calculator may suffice all your needs. However, it’s not easy when you own a business, be it small scale or large. No business can run without a budget (and of course the employees and other resources). But budgeting forms a major aspect of every business. It is the first step towards the growth. From planning the next move to overcoming past losses, budgeting helps in recording you money inflow an outflow so that you can predict where your finances are heading in the upcoming months and years.

If your business needs budgeting or if you want to discuss your personal accounting needs, BookSmart Accountants are there for you. We help small businesses keep a check on their business performance by evaluating key focus areas such as cash flow, profitability, liquidity etc. so that you as a business owner understand your business performance. We also provide taxation, accounting, compliance, auditing services to public and private businesses as well as individuals located in Melbourne, Australia; offering our clients the choice of onsite and offsite meetings for their convenience.

Call us at 1300 300 106 to discuss your financial needs today.

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