Keeping it basic is acceptable: when you are learning a new skill, like bookkeeping.
We can all agree that when you have a firm grasp of the fundamentals, you can launch your business into the stratosphere of financial success – whatever that looks like for you. So, what are the basics of bookkeeping you might ask? Well, sit down, relax and let’s get into some of the tips you as female founders need to know to get your business on the trajectory to success.
Before we get to the nitty-gritty of bookkeeping, let’s talk about what bookkeeping is and why it is so important to your business. Bookkeeping is the process of recording and summarising financial transactions. It is an essential part of running a business, as it helps you track your income and expenses, identify areas where you can save money, and make informed financial decisions. Therefore, bookkeeping allows you to have a complete picture of your business and its health.
Here are some tips to help you with your bookkeeping:
- Separate Bank Accounts– Having separate personal and business accounts helps you keep track of your expenses easily and prevent overspending. This also helps with organisation and tax compliance.
- Maintain Records – I cannot stress enough the importance of maintaining clear and accurate records of all your financial transactions. You are required by law to keep proof of financial transactions for a minimum of 5 years. An accounting system can help you with this. There are several cloud-based systems. Some of the more common systems are Xero, MYOB and QuickBooks. Keeping good records will help you track your income and expenses, identify any problems early on, and make better financial decisions.
- Cash Flow – Track your cash flow. Cash flow is the movement of money into and out of your business. Without cash flow, you don’t have a business. You can be making a profit but without cash, your business will fail because it is unable to pay its expenses.
- Plan for Taxes- We might not like them, but we can plan for them. Understand your obligations. If you are GST registered, save the GST liability in a saving account until it is due at the end of the quarter. You can do this with the PAYG you withhold for your staff as well as your income tax. This eliminates the assumption that all the money in your bank account is for when it belongs to the ATO.
- Seek Professional Help – Consider if you should get a bookkeeper to assist you. If you do, make sure you keep abreast of your financials. Have regular meetings to understand the business performance. You may also need to engage an accountant or small business CFO services like those provided by Financially Empowered.
By following these tips, you can ensure that your bookkeeping is accurate, organised, and compliant. This will help you run your business more effectively and make better financial decisions.
This blog was written by CPA Management Accountant and Founder of Financially Empowered Grace Mugabe and is a part of our WOMEN’S BUSINESS Series.
If you would like to learn more we have some up and coming workshops
The Realise Business team is adept at stepping in at all levels to meet business financial requirements. Our team has experience in managing finances for a wide range of industries. As a result, we can devise a tailored financial plan for a new business. If you would like to know more, get in touch.