How to improve bookkeeping in your small business

Bookkeeping is essential in every business, but if you’re a small business owner, working with a professional bookkeeper can make it easier for you to comply with your tax obligations.

But beyond simply doing your tax or your BAS, staying on top of your record keeping helps you to really understand how well you are doing as a business. It’s a common story that some small business owners work every hour that’s available, but don’t actually seem to be making money.

 

This is often because they aren’t controlling their cash flow – they are paying their debts but their customers aren’t paying them, and sometimes businesses simply don’t understand that because they aren’t paying any attention to their financials. That’s one of the key reasons why small businesses go bust in their early years. So, keeping your books up to date and understanding what they are telling you can be the key to survival for your small businesses.

Keeping a close eye on your debtors and creditors is key. It’s great to make sales but no use at all if those customers aren’t paying you in a timely fashion. Poor cashflow can impact on your ability to service key creditors like the bank and the ATO and you really don’t want to fall behind with either of those.

 

A professional bookkeeper, or the right bookkeeping software will help you stay across all your tax obligation and give you good oversight on how your business is progressing.

Using a third-party bookkeeping service like the one offered by H&R Block will give your business a number of key advantages:

1. More time. You’ll get valuable time back which can be spent in doing the things you do best, like making a profit!

2. Expertise. Using an external bookkeeper gives you access to a qualified resource; someone who understands the needs of your business, your reporting obligations and the technological solutions to give you the end-to-end solutions you need.

3. Save money. Because an external bookkeeper isn’t part of your organisation, you save money in having to either employ someone to do it in-house or alternatively to do the bookkeeping yourself, which is time you could more productively spend on other things.

4. Access to technology . Most small business can’t afford state of the art bookkeeping technology and those that can generally don’t have the expertise to use it. Employ an external bookkeeper and you can get access to the latest cloud based software, guaranteeing easy, quick and reliable reporting. You’ll get real time visibility into your business financial performance and opportunities to improve as well as streamlining the preparation of BAS, tax returns and financial statements.

This advice is of a general nature. Please speak to your tax professional for advice tailored to your individual circumstances.

Mark Chapman

Mark Chapman is Director of Tax Communications for H&R Block Australia. He has been a tax adviser specialising in advice for individuals and small businesses for over 20 years, in both the UK and Australia. Mark is a Chartered Accountant, CPA and Chartered Tax Adviser and holds a Masters of Tax Law from University of New South Wales. To find out more about how H&R Block can assist your small business, visit www.hr.block.com.au

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