Although it’s not the most exciting time for many business owners, ‘doing the books’ and keeping accurate records is essential for the success of any business. Managing bookwork in hospitality can be trickier than many other industries, and often more stressful too. Here are five handy hints to help ensure you start 2014 the right way – keeping your bookkeeper and accountant happy!
- Get the accounts done
It’s very important to be on top of your accounts so you can get a clear picture of how your business is doing. If numbers aren’t your thing or you simply don’t have enough time – get a bookkeeper. This small investment will eliminate the hassle and will likely save you money in the long run. Having an up-to-date picture of your business allows you to control your cash flow.
- Keep business and personal separate
It’s imperative to keep your private transactions separate from your business transactions (including bank accounts, credit cards and expenses). Speak with your accountant about the most tax effective way to draw down funds based on your structure. This will allow you to clearly see the performance of the business and not have it clouded by personal expenses.
- Get the right accounting software
If you’re unsure of which software to select, you may contact an accountant or peer who can discuss the options with you before you buy. At Redmako we prefer to use Xero, which is cloud-based. One of the key benefits to cloud software is that you can access your financials anywhere, anytime or have your bookkeeper or accountant check information for you. Your files will always be backed up regularly in the cloud. It’s the most hassle-free way to do your bookkeeping.
- Get all your tax and compliance obligations right
As a business owner it’s your responsibility to know what’s required of you. All businesses are required to register for an ABN, and if your turnover is more than $75,000 then you must apply for GST registration. A few other things you are legally required to do include:
- Keep receipts for all acquisitions in order to claim on your expenses
- If you employ staff, register for PAYG withholding Tax. (This is where you pay staff and withhold some tax on their behalf.)
- Complete and lodge monthly or quarterly Business Activity Statements (BAS) with the Australian Taxation Office.
Do what you can to create systems which allow you to streamline and automate your business processes so you can easily stay compliant.
- Keep your receipts
You’re required to keep the following records for a minimum five years.
- Invoices and receipts you provide to clients or customers
- Invoices for goods and services paid via the business
- Records of payments made to employees, their Superannuation and ATO
- All financial statements
- Statements for bank accounts and credit cards
- Stock take records for end of financial year
These five things are the basis for compliant and successful business bookkeeping. Make sure you’re doing all of them to stay on top of your books in 2014!
Article by Nicole, Redmako