Five facts about bookkeeping for small business

May 5, 2023

Bookkeeping is an essential part of running a small business.

But it’s not something most people learn in school, and many business owners aren’t sure where to start when handling the finances of their organisation. For those needing a little extra help, we have compiled five facts about bookkeeping for small businesses – from knowing the basics to choosing the right accounting software for your organisation.

We highly recommend taking advantage of these helpful tips so you can hit the ground running with keeping track of your finances – ensuring success long into the future!Tracking your business’ financial transactions, records, and status boils down to one thing: small business bookkeeping services.

Accurately managing your small business finances helps you to be confident that everything is running as it should and that you have a healthy amount of cash flow for your expenses.

With reliable and systematic bookkeeping in Melbourne, small businesses like yours can be financially stable, making room for growth and expansion long into the future.

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Five benefits of bookkeeping services for small businesses

If you’re looking for ways to increase your profits but are finding it challenging to do so, then it’s helpful to start analysing your small business bookkeeping processes.

Understanding the benefits of small business bookkeeping can transform the way you manage your company’s finances.

So here are some basic yet important facts about bookkeeping that will help you know its worth in your business.

Fact #1: Bookkeeping functions both for legal and financial management purposes

Small businesses deal with various financial transactions almost every day. Thus, bookkeeping functions to keep an organised and updated record of receipts and files.

Bookkeepers getting hold of this information is useful both for legal and financial purposes.

Bookkeeping helps you to comply with your tax and superannuation requirements so you won’t miss any opportunities or get into any legal trouble.

The Australian Taxation Office (ATO) requires you to keep track of all the financial records for your business transactions so that you can promptly respond to audit reports and ATO inquiries.

All businesses in Australia have the responsibility to follow taxation, BAS, and superannuation rules.

And for you to comply with the ATO’s mandatory reports, you will need an effective bookkeeping process to present an accurate representation of your small business’ financial records.

Avoiding typical bookkeeping mistakes is crucial for maintaining the accuracy and integrity of your financial records. Here are some bookkeeping mistakes and how you can avoid them.

Fact # 2: Bookkeeping provides insight into the overall financial health of your business

Do you want to assess the overall financial health of your business? Then make it a priority to organise your bookkeeping system with the help of a bookkeeper.

By keeping accurate and updated bookkeeping documentation, you can fix your business’ records such as income statements, balance sheets, and cash flow statements.

What does a bookkeeper do for a small business?

Bookkeepers keep accurate details of your business’s financial records and can help you keep clean, organised business accounts that play an important role when making your small business decisions.

In turn, bookkeepers help you analyse your business records, help you strategise, and recommend ways to improve your business spending and savings.

Organised record-keeping helps you run your small business effectively, as you keep track of all your daily business transactions from:

  • Inventories
  • Cash
  • Loans payable
  • Payroll expenses
  • Earnings
  • Accounts payable

By having a clear view of the financial health of your business, you minimise any risk of charges and penalties from the ATO that can affect your superannuation, tax, and other financial obligations.

You can check out this article to know more how small business bookkeeping can help your business grow.

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Fact # 3: Improves your cash flow management

Business owners who know how to manage their cash flow keep a balance of their small business’s inflow and outflow.

Better cash flow management enables businesses to expand and track all profits and expenses.

Bookkeepers can create manageable financial plans and frameworks that will improve your revenue and expense percentages.

A consistent cash flow forecast is needed to project the correct amount of cash gained or lost, whether on a monthly, quarterly, or annual basis.

Bookkeepers help you effectively track profits and investments, and if there are unexpected expenses, the funds allocated will not result in debts.

Fact #4: Make the most of bookkeeping with anywhere-anytime access thanks to cloud bookkeeping software

Have you tried to manually track all your business expenses, income, and debts only to end up getting more frustrated dealing with clunky software and outdated systems?

Why not maximise the use of your cloud bookkeeping system which helps you to manage your cash flow successfully?

Shifting to a cloud bookkeeping system can help you to take your business and financial goals to the next level.

Cloud bookkeeping software such as Quickbooks, Xero, and MYOB for small business gives you an auto-updated and real-time monitoring of your financial status 24/7.

You can save time and effort by tracking any changes in statistics and financial inputs made by your colleagues or anyone who has access to your cloud bookkeeping account.

Cloud booking also helps you make immediate and smart decisions by getting a complete financial forecast after each collaboration.

So why not enjoy the benefits of a secure and accessible cloud-based bookkeeping service anywhere and anytime?

Fact # 5: Outsourcing your bookkeeping is still the best choice you can make for your business

Small businesses will always have various options when it comes to bookkeeping.

DIY bookkeeping can leave you feeling frustrated, stressed, and overwhelmed. Taking matters into your own hands without any expertise on financial matters can eat away a lot of your time.

How do small businesses learn bookkeeping?

Many entrepreneurs are unaware of common small business bookkeeping problems that can significantly impact their financial stability.

One of the best ways small businesses can learn how to bookkeep is by outsourcing a bookkeeping service in Melbourne.

Not only will it benefit your company, but it also gives you an idea of how to manage your finances yourself as well as all the various tasks and responsibilities your bookkeeper can assist you with.

The good thing about outsourcing to a QuickBooks, MYOB, or Xero bookkeeper in Melbourne is that you unload the weight of doing all the manual work yourself, while still having complete transparency and access to data and changes that are being implemented in order to make your business better!

Looking for a reliable bookkeeping service for your small business?

Maximum Business Solutions provides bookkeeping solutions to all types of businesses across Melbourne.

Our team of qualified, experienced, and transparent bookkeepers provides you with a range of bookkeeping services, including:

  • Competent payroll processing
  • Audit preparation
  • Consultation
  • Account management provisioning
  • Superannuation
  • Cloud software implementation
  • Debt collection services
  • Business Activity Statements (BAS) and Income Activity Statement (IAS)

Ease the hassle and stress of all your bookkeeping needs with the help of Maximum Business Solutions!

Call us on (03) 9589 0128 for a trustworthy and complete bookkeeping service in Melbourne. Alternatively, get in touch with us online today.