Getting started with DIY bookkeeping
Bookkeeping is a vital part of running a business, but can also be overwhelming, especially if you’ve never done it before. These DIY bookkeeping tips will point you in the right direction.
1. Set up a filing system for record keeping. Create folders entitled Data entry, To be paid, and To be filed or scanned, and either file your paperwork in date order in a lever arch file, or opt for a paperless office.
Use a RED pen to make notations on any paperwork pertaining to expenses, such as the reason for the expense, the client it relates to, the amount and date of the payment, and, if relevant, whether it is to be a split allocation.
Ask your tax accountant what documents the business should supply at the end of the year, and if practical, maintain a separate file for each type (for example, bank statements, leases).
2. Find a tax accountant that suits your business and if you haven’t already, decide on the optimal structure for your business.
3. Confirm with your accountant whether your business needs to register for GST, and if so, take the necessary steps
"Ask your tax accountant what documents the business should supply at the end of the year, and if practical, maintain a separate file for each type."
4. Establish a relationship with the Australian Taxation Office (ATO), who offer informative seminars and workshops on bookkeeping and related issues that are specially designed for small business.
Also sign up for AUSkey, an online security credential that will allow you to submit your business activity statements and instalment activity statements to the ATO online.
If you’re really keen, you can even follow the ATO on Twitter @ATO_gov_au.
Want more articles like this? Check out the financial management section.
6. Establish a chart of accounts that suits your business and provides you with meaningful, useful information.
7. Design a business invoice that includes all the correct information and helps you get paid on time.
8. Set up rigorous systems for dealing with your expenses (accounts payable).
9. Set up efficient systems for chasing payments (accounts receivable).
10. Create checklists for the bookkeeping procedures you’ll use weekly, monthly, and quarterly.
After all this, if you decide that you’d rather outsource your bookkeeping, or even just its initial set-up, make sure you know the right questions to ask when hiring a bookkeeper.
Phew. That should cover it. If you have any questions about DIY bookkeeping, or think I’ve missed anything, please tell me below.