A strong bookkeeping system is an important part of keeping accurate records for different purposes. Whether you’re analysing business activities, lodging and paying taxes, or meeting your reporting requirements, it provides you with everything you need, helping you save time.
Under the Australian tax law, businesses are required to keep records relating to income tax, payments to employees, goods and services tax, superannuation, fuel tax credits, fringe benefits tax, and payments. This is why it’s important to have a bookkeeping system that stores all these data in an organised way.
It can be challenging to set up your own system without a background in bookkeeping. If you need help getting started, hire an accountant, bookkeeper, or business advisor. You can also outsource bookkeeping tasks to a third party provider. Once your system is set up, follow these tips to keep it organised:
Open a Dedicated Business Bank Account
Open a business bank account and pay all your expenses through it. Don’t use it for personal expenditures, though, as it is difficult to separate personal and business statements. Keeping accounts separate protects you from personal liability should you encounter any problems.
Be Thorough and Consistent
Bookkeeping should be a process done on a weekly basis. Don’t let receipts, invoices, and other financial documents pile up; put them in their proper folders or log them into your system to keep all your records accurate. If you don’t have the time, consider bookkeeping outsourcing services.
File for the Long-Term
For auditing purposes, the taxation law requires businesses to keep financial records for least five years after submitting a relevant tax return. To keep accounts organised, create a filing system and start new folders for each financial year. Have your business records backed up, and prepare hard and soft copies so you have records in case something happens to one of the two.
The right training, discipline, and effort can help you take control of your finances. Review your records every month and stay on top of your finances.