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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

When A Client Wants To Do Their Own Books…

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

Have you found that the economy is causing some of your clients to take a hard look at reducing expenses? Is that making them consider the idea of doing their own bookkeeping?

If so, don’t panic. As a bookkeeper, there is actually a golden opportunity here, if we look a little deeper.

The first reaction most business owners have when they see a sudden (or not-so-sudden) dip in income, is to tighten their belts. And unless they are aware of the true value of your services, they may target their outsourced bookkeeping expense for elimination. “It’s just simple data entry,” they may think.

Of course, we bookkeeper’s know that accurate bookkeeping involves far more expertise than simple data entry. But sometimes our clients don’t fully realize that.

What To Do About It

Before I show you how you can turn this into a golden opportunity, let me tell you what NOT to do.

Don’t sound devastated when your client breaks the news. If you sound rattled and scared to lose their business, that will only make them not want to discuss alternatives with you. (They likely feel awkward talking to you about it already.)

Instead, step into the role of consultant and explore whether this change truly is the best option for your client’s business success. To do this effectively, you MUST get out of your own way!

DON’T worry about losing the client. Really. This will likely turn out to be a good deal for you whether the client wants you to continue doing the bookkeeping or not!

Focus fully on your client’s welfare for the moment.

DO look for how you can assist your client to make the best possible decision for his / her success. You will stand out from the “typical” freelancer in this situation. And you will be setting yourself up for success.

Here’s why.

If, in fact, it truly would be a wise decision economically for your client to do the books on his/her own (although, most often, this is simply not the case), some training is definitely going to be needed. Maybe a lot of it. Aren’t you in the best position to provide that training?

Even after the client has been adequately trained (and the client isn’t overwhelmed by what it really takes to get the books done right), s/he will probably need ongoing support. This service alone could actually save the client from making a big mess that will cost much more to clean up in the long run.

You could even offer to do the bank reconciliations and/or set up a regular review of the books on a monthly or quarterly basis, just to make sure everything stays clean and up to date. The client may find this an invaluable service that won’t break the bank.

This type of arrangement is good for your bottom line too because your fee as a trainer and consultant should be at a higher rate than what you’re charging for basic monthly bookkeeping services.

Positioning Yourself As A Consultant

The most important factor in pulling this kind of transition off is to really listen to your client and hear where the pain is coming from. You want to provide highly valuable solutions that your client will appreciate.

If your client really does want you to continue doing the books, but they are simply looking to cut overhead, offer suggestions for where else in their business they might cut some fat that will provide short-term as well as long-term results. Show them how to find these opportunities in their financial reports.

I’ve seen clients whose sole reason for taking back the books was to save money. But they had no desire whatsoever to keep track of their finances. So they soon found themselves in hot water because their bookkeeping records quickly became a disaster. And then, of course, they had to pay big bucks to have their accountant clean up the mess at tax time. Not smart.

Save your clients from this pain and offer a great solution that works for both of you! (Remember: Win-Win)

So whether they keep you as their bookkeeper or not, help your clients to avoid the penny-wise-and-pound-foolish mindset by showing you really care about their success. If needed, help them tighten the belt (as well as identify ways to pull in more revenue) by transitioning to the role of business consultant.

As a valued advisor to your clients, you will make your services indispensable, increase your rates, and hold on to top-notch clients for life.

Who knew the tight economy could turn out to be such a blessing in disguise?

Maintaining proper payroll records

Posted by   |   June 26th, 2014   |   Categories: Business Fundamentals

I know the end of the financial year hasn’t occurred but its a good idea to start thinking about it. And one of the things that needs to be seriously considered is your business’s payroll record keeping.

 

I know it sounds easy to keep records regarding employee details, pay and leave. You can keep these records either electronically or in a handwritten format.

 

But here’s the thing. You have to keep these records accessible for seven whole years. If a stern looking officer from the ATO taps you on the shoulder requesting certain documents, can you lay your hands on them pronto.

 

You can store handwritten records in archive boxes or somewhere in the office. But for computerised records, you’re best to archive data either to a CD, memory stick or in the cloud.

 

I always advise my clients to store their records off-site. Importantly, if there is a password connected to the memory media, make sure it’s close by. Can you imagine the nightmare if you had changed the password on your accounting software in later years and couldn’t open the backup copies from previous years because the passwords are different. It happens!

 

If you need to discuss how to maintain payroll records, please contact info@bookkeepingconcepts.com.au

 

How to create a Customer Card

Posted by   |   June 26th, 2014   |   Categories: MYOB Tutorials

When I see a new client who has begun using Myob, I’m sometimes amazed at the lack of information they put into their accounting software. Myob is really a combination spreadsheet and database.
By including information into the customer card, Myob provides business owners and managers with very valuable information that can be extracted to make important managerial decisions regarding that customer. Some examples are below:

  • Payment terms
  • Credit Limits
  • Creating personalised letters
  • Discounts for early payments
  • Phone/fax/email details
  • Income classification
  • Contact Log

Another area of the customer card that is often overlooked is the Actions button. Once clicked you will see many options to view essential information or create transactions or reports, communicate with customers via email.
If you’ve found this information valuable, check out the video on How to Create a Customer card at myobtrainer.com.au

A Timely Reminder

Posted by   |   June 10th, 2014   |   Categories: Business Fundamentals

Got a call this week from a lady I’ve known a long time. She said she desperately needed help. I said okay what’s the problem. She said, are you sitting down. I became intrigued with that comment. She hesitated, I waited. Finally she in a whisper said; I have not lodged my tax return or BAS statement for eight years. read more

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