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Business Fundamentals

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Why Entering A Supplier’s Bill in Myob Is So Important?

Posted by   |   June 21st, 2016   |   Categories: Business Fundamentals

Hands Up! Are you the typical business owner that when you receive a bill from a supplier, throws it in a folder/tray/desk draw or somewhere on your messy desk/dining room table? Do you say I’ll pay the bill when I have money in the bank? Then completely forget about it and get on with the job of running your business. Out of sight is out of mind. Right!

But is it good business practice? It is if you have a head in the sand approach to your business, wishing that sales just happen and hoping your suppliers don’t push you to pay them.

And what happens when a supplier calls and says he needs to be paid. Do you know off the top of your head how much the supplier is owed? And what if the supplier provides goods or services a number of times a month? Do you take the supplier at his word and post a cheque or EFT the amount he says he is owed? What if he’s made an error? Can happen. Often does happen. As a bookkeeper, I have come across suppliers who re-email an invoice after the payment due date. Now you have two copies of the same invoice. You may pay a bill twice without realizing and never pick up the duplication.

Accounting software allows you to keep track of whom you owe money and when they’re due to be paid. If correctly set up, you will be alerted if an supplier’s invoice number has previously been entered, preventing the possibility of paying an invoice twice. If you can only pay part of a supplier’s bill or multiple bills, no problem, the software keeps a running balance.

Business owners need to know how much they owe their suppliers and when they need to be paid. Keeping on good terms with suppliers is important. If you make a habit of paying your bills on time or early, there is every chance you can negotiate a discount from your supplier. They also need the cash flow and are often quite prepared to come down to your terms. It may not be a huge discount but over a year these discounts really add up and add to your bottom line. Cash is king, and as a business owner you need to ensure tight control of the money flowing out of your business.

Never pay Supplier’s bills from a Statement!

Posted by   |   May 25th, 2016   |   Categories: Business Fundamentals

As business owners, we are busy and for many of us record keeping is sometimes a price too high to bear. If your business is small, you have all the facets of your business in your head, don’t you? Or do you?

What type of business do you run? If you purchase from regular suppliers, there’s a good chance that you buy products and services from your suppliers more than once a month. Do you know off the top of your head how much, to the cent you owe your suppliers? Do you know how old those bills are? Do you know the terms of payment you have established with your suppliers?

As a contract bookkeeper, I can be required by clients to pay supplier’s bills, or in accounting jargon Accounts Payable (A/P). I have taken over the responsibility left by owners or the previous persons paying the bills and been witness to at times huge messes that I have the pleasure (sic) of cleaning up in the role of bookkeeper. It can be an expensive exercise for the business owner to put right.

Does this following scenario sound familiar? You receive a bill/invoice from a courier dropping off products, or you received the bill via fax or email? You drop the supplier’s bill in either a tray, drawer, folder or somewhere on your desk under a pile of other stuff. You forget about it as you go about your busy day. You get rung up weeks later by the supplier chasing you for money, you ask how much you owe, write out a cheque or transfer an amount. A day or so later a statement arrives from that supplier with those same amounts you just paid. You throw that statement in the same areas where you throw your invoices. Finally some time down the track you find the time to pay bills. You pick up the statement, look at the balance amount and write a cheque or transfer the money.

What a mess. You have just paid some bills twice. Now, if the supplier is honest, they will ring and explain the double payment. If they are honest! What should you do?

If you use an accounting software program, enter every invoice you receive from a supplier. If you own a café/ restaurant or you’re a tradie, for example, you may have a running account with various wholesalers, and may receive a number of bills from them during the month.

Keep all the supplier’s bills together, either in a concertina folder, an arch lever folder or any method which makes sense to you. Once the statement arrives, open up your accounting software to the Accounts Payable report. Does the outstanding amount in the Payables Report match the supplier’s statement balance? If not, why? Have you received a duplicate invoice, or maybe a bill wasn’t emailed. If you have entered a bill twice, delete it. If you did not receive a bill or can’t locate it, call the supplier and ask them to re send it. Once you have all the bills that match the supplier’s statement, you’re in control of your accounts.

Positive cashflow in business is hard enough. Don’t make it more difficult by not keeping on top of your bills or double paying. How do you pay your bills?

If you have accounting software or plan to purchase accounting software and would like to learn how to become an expert entering and paying bills, go to myobtrainer.com.au and enter your details.

How much does it cost your business when the record keeping falls away?

Posted by   |   December 17th, 2015   |   Categories: Business Fundamentals

One of the intriguing things I notice from time to time are clients who are their own worst enemies. They’re happy doing their books, even if they are not 100% sure the transactions they’re entering in Myob is absolutely correct.

But what happens when they enter a transaction they have to get absolutely right, realise after they have posted that it’s not right and can’t leave it to the accountant to fix it at years end?

This is what happened to a new client of mine. Let me explain….

I was asked by an accountant to help a client bring their books up to date.The client had not lodged their last two BAS’s. It was explained to me by the client that they had messed up a pay run in April and didn’t know how to fix it.

The client’s internal administrator continued to enter other transactions for the next two quarters except the payroll, not wanting to create a larger mess. The penalties of two missed BAS lodgements and not lodging the PAYG Annual Summary on time are high, but what troubled the owner more was not knowing the company’s cash flow position. He knew he had to pay the GST and PAYG for two quarters but was unsure what the amount was. He didn’t know whether his business had enough money in the bank to cover his obligations.

Finally, six months after entering the messed up payroll transaction in Myob, the owner discussed the missed lodgements with his accountant. The accountant took it upon himself to find someone with expert knowledge of Myob to untangle the mess. All is well now, but the moral of this story is not to leave your books in such a state, as your business health depends on accurate and up to date record keeping.

How New Technology is Changing the Role of Business Owner & Bookkeeper

Posted by   |   September 08th, 2014   |   Categories: Business Fundamentals

How New Technology is Changing the Role of Business Owner & Bookkeeper

Technology is changing what bookkeepers do for their clients, along with HOW they do it.

As online bookkeeping is rapidly becoming the norm, working with business owners in the virtual world… or headed in that direction, the role of the bookkeeper and business owner is in the process of some major changes.

A large part of bookkeeping has been to do “intelligent” data entry so that financial records are accurate. But with the improvements in electronic information processing, much of this is being done by computer programs via the web instead.

Think about how banking transactions can be downloaded directly to your accounting software. Or services like ShoeBoxed can scan paper receipts and categorize expenses for you.

And finally, there are new programs emerging that bring all the financial data together, using the Internet, to feed into the bookkeeping records automatically… from banks, suppliers and client sales, using online accounting programs like Xero.

What does this mean?

Entering data into bookkeeping software is something that will eventually be nearly eliminated (or at least greatly reduced). Does that mean the role of the bookkeeper will also be eliminated?

No. But WHAT bookkeepers can actually do for their clients… and the value they provide… is starting to shift dramatically. They are moving from entering financial information efficiently and intelligently to get it into the bookkeeping records to managing the financial data flow and interpretation of it. They are facing a unique opportunity to assist their clients with getting the real VALUE from what their financial information means for their business. This prepares them for more productive meetings with their accountants for tax and business planning.

In other words, they are growing into the role of assistant / consultant with their clients to help them get the BENEFIT of their financial information for managing business. This is MUCH more valuable than simply doing the clerical work of keeping records updated after the fact so taxes can be filed. Their services are becoming more present and future focused.

And THAT is a VERY good thing for both the bookkeeper and their clients… Be aware that they are coming, and they are taking hold rapidly. Bookkeepers need to pay attention to how their existing clients are reacting to and embracing new mobile / online technology. Small business owners are changing HOW they operate because of the major advancements in mobile and online technology coupled with affordable applications… this includes how they get their bookkeeping done.

So the question is, if these changes are coming – whether we like them or not – what will the bookkeeper do to prepare for it now, and how will it affect the way they provide YOUR bookkeeping services in the near future?

As for the BUSINESS OWNER having control over some or all the entering of transaction, how will this affect their understanding of what is happening in their business from a management reporting perspective. There is a great opportunity for business owners to obtain a much deeper understanding of what their management reports are saying because their bookkeeper has now become a trusted advisor or consultant to your business.

I’d love to hear your thoughts, complaints, excitement, or any other reactions you have to where bookkeeping is headed and how it is changing the roles of bookkeepers and their clients in the months and years ahead. Please leave your thoughts and comments below.

 

6 Tips for great Business Record Keeping

Posted by   |   August 31st, 2014   |   Categories: Business Fundamentals

The following list is very important to consider if you are

  • thinking of starting a business
  • The owner and responsible for keeping the business records
  • responsible for managing the records of small businesses; for example, you are the bookkeeper or a tax agent

Tip 1  Legal Requirement

 

black-boardIt’s a legal requirement that you must keep good records. The law states you must keep

business records for

– for 7 years after they have been prepared or the transaction completed, whichever occurs latest

– in English or a type of form that can be accessed and understood to determine the amount of tax you need to pay

– Capital Gains records for assets that depreciate over long periods of time

– You have a choice whether to store records in either paper or electronic form

– It can be as simple as using an exercise book or commercial cash book that can be purchased from a newsagent or stationery store.

– If you choose the electronic form, you need to be familiar with accounting principles and how the software calculates and treats the information

Tip 2  Sales records

– sales invoices, including tax invoices

– sales receipts

– credit card statements

– cash register tapes

– bank deposit books and account statements

Tip 3  Purchases/expenses records

– Bills or Supplier invoices, including tax invoices

– purchase receipts which include an ABN

– cheque butts and bank account statements

– credit card statements

– records showing how you worked out any private use of something you purchased

Tip 4  Records relating to payments made to your employees

– tax file number declarations and withholding declarations

– withholding variation notices

– worker payment records

– PAYG payment summaries

– annual reports

– superannuation records

– records of any fringe benefits provided

Tip 5  PAYG Withholding records

– records of any amounts withheld from payments where no ABN was quoted

– a copy of any PAYG withholding voluntary agreements

– records of voluntary agreement payments

– PAYG payment summaries

– PAYG payment summary – employment termination payments

– annual reports

Tip 6  Records relating to your fuel tax credits

– records of fuel acquired

– records of eligible and ineligible fuel use

– records of claim calculations

– records of any loss, sale or disposal of fuel!

 

Reference: Australian Taxation Office

If you need further information or would like assistance with your bookkeeping,

please visit myobtrainer.com.au

Get Started today, get in contact with us now to discuss your MYOB Training needs no obligation
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