Tips to great Bookkeeping

Most people think that starting up a business takes a lot of money and carries a lot of risks. Nowadays, even small businesses can take as much as tens of thousands of dollars to start, initially paying for the overhead and salaries until profits come in, which may come months after. But with excellent business management strategies, the company can collect its profits early on. One of the factors that make businesses successful is the ability to maintain financial control.

By hiring a bookkeeper to track the business expenses and income helps organize all the needed information and documents necessary for completing tax payments and returns. By documenting and entering the details of all cash flows and business transactions in a book and ledger, a business owner can easily get advice from a tax consultant, accomplishing all the arrangements for tax payments and tax return requirements at a much faster rate.

Bookkeeping does not refer to tax preparations specifically. It’s keeping records and receipts of everything the company spends money on in an organized system. Hence, it allows business owners to maintain control over the business’ finances.

Many of the business accounting tasks are limited and must only be done by professional accountants. However, tasks such as bookkeeping can be done by the business owner. And to be efficient in keeping track of one’s business expenses and income, here are some tips that can help:

→ Always keep an accurate record of business transactions. As you keep track of revenue versus expenses on a weekly or monthly basis, you can easily determine how your business is doing.

→ Update your books. A nicely organized and detailed work record is a delight to your accountant or tax consultant. In this manner, your accountant will be finished with your tax returns and payment settlements in no time, which in turn saves money taking up less of your accountant’s precious time.

→ Maintain daily records. Updating your books and your files on a daily basis eliminates the chances of missing out some important receipts and payments that happened during the day.

→ Keep all the receipts as well as proof of transactions to back-up all your entries on the ledger. Invoices, credit card receipts, deposit and withdrawal slips, vendor invoices, cash register receipts, checks and cancelled checks, and all other forms of document or papers are all important in determining direct expenses and overhead expenses.

→ Given the chance to learn, take advantage of the time you can gain by learning more bookkeeping knowledge. Update whatever you know by taking the time to read accounting books or taking short courses that are both offered online and in community colleges or universities.

Making it a habit to be organized in your bookkeeping task will be helpful in ensuring the success of any business, especially small business. Since all records are kept, owners eliminate their chances of having unnecessary expenditures and therefore minimize the cost of operations. Tracking your expenses will allow you to maintain control of your company’s spending and increase profits over time.

Smart Ways to Invest Your Tax Returns

Australian individual taxpayers can file their return online with the ATO’s myTax software, by ordering a printed copy of the tax return form, or with the assistance of a registered tax agent.

How can you wisely invest your Tax Refund?

If you are living in Australia and you want to invest into something that you find useful than why invest from your earning when you can do it from your tax refund. Let’s focus on many options available for you in which you can invest your tax refund.

1. The most important thing in your life is healthy and you can invest your tax refund in an emergency fund. Why? Because it is a bitter reality that sometimes unexpected things happens in your life and then you don’t have money to deal with it, so it the best option to invest it into your emergency fund.

2. Worrying about your credit card debt, well then invest your tax refunds on it because it will stabilize your monthly budgets and you don’t have to worry about it anymore. For instance, if you have $1000 credit card debt then it will take you more than 5 years to clear that off, its small amount but significant impact on your financial budgets.

3. You can invest it into a savings account that will give you good returns after 20-30 years.

4. Well, what about you? You can invest it in yourself because you know the best about your weakness and strengths. The best source is to invest in your self-development/education or even some technology that will benefit you in becoming more productive and increase your skills to make a better career or earn more revenue.

5. Invest in shares – you can minimise your risk by building a diverse portfolio of shares from different companies, so you’re not putting all your eggs in one basket. You can use an online broker that will assist you with your investments. CommSec is one of the online brokers that you can use and it’s a subsidiary of the Commonwealth Bank of Australia.

6. You can also use your tax refund to pay your mortgages or putting the money in offset account to save on interest.

You can find more about tax returns by clicking the link below:

Reasons Why Small Businesses Fail

Starting up a business and becoming self-employed can be very exciting. What many people don’t know is that more than 50% of businesses fail within the first five years and it is regrettable they do not understand why they probably failed. In this piece, I am going to share with you the significant factors that contribute to small businesses failing and how you can overcome them.

Reasons that contribute to small business failure and how to overcome them:

1. Lack of management and leadership skills

In any institution, management is the key, poor management, and poor leadership skills can cause business failure. When we talk about management, we mean all sorts of management; handling staff, time management, cash flow management and so on. Before starting up a business you must make sure that you are well acquainted with the management and leadership skills. You can do this by working for someone else to gain those skills. You can as well take a personal initiative and attend management lessons or find a mentor to guide you through management lessons, but the bottom line is, never start up a business when you don’t have proper management skills.

2. Wrong decisions

They say “error is to human” sometimes in our daily lives we make wrong turns; it also happens in business. It is always advisable that before you take any drastic move or change always consult. You can ask other business partners, friends, and even financial experts if necessary.

3. Poor planning

Without proper planning, your venture is bound to fail. Before you start running a business, you need to sit down and set out your goals; you need to know where you want your business to be in 2years, 5years, and much more.

4. Losing touch with your customer needs

Always remember in business” the customer is always right” you need to know what your customer wants and needs are. We are living in a dynamic world, and customers needs to keep on changing. As an entrepreneur, you need to be very swift in embracing change. Always be on toes trying to understand new trends in the market and how technology is changing.

5. Competition

We are all living in a competitive world” man eat man society” Even if you are the inventor of an idea, nothing can stop your competitors from inventing a similar concept. It’s upon you as a business person to keep your head high and try to understand what your competitor is doing. Be innovative and always diversify your customer base

6. Bad debts

Cash flow is the main thing in running a small business, if there is no cash flow in the industry, the company will collapse. Bad debts can lead to lack of cash flow in a business, as a business owner, you need to establish a credit limit for your customers that may not compromise the cash flow in your business.

7. Theft and fraud

Fraudulent activities or robbery can be a significant cause of business closer; this can be either internal or external. The owner of the business should ensure that enough security measures are taken to prevent this from happening. It can be done by close monitoring of staff activities, maybe through CCTV camera installation. Also, ensure that there is proper bookkeeping to reduce theft and fraud.

8. Excessive spending of business income for personal use.

The entrepreneurs should stop excessive spending on personal materials. The business should be able to pay bills and pay workers as well.

The reasons illustrated above are the primary reason why a lot of small businesses fails and explanations on how to overcome those challenges.