Actionable Tips for Better Record Keeping in Your Business

Actionable Tips for Better Record Keeping in Your Business

by | Thursday, May 23, 2019 | Biz Money, Business, GST

Repeat after me: “a shoebox alone is not a solution”. Ok, look. I know lots of business owners do this – and it’s not the end of the world if that’s where all your receipts are stored right now. I’ve got a few tips up my sleeve to help you keep on top of them – and make tax time more about reviewing info, than spending hours going through your shoebox receipts. 

First up – have a think about the systems you currently have in your business. What’s working? What’s not working? If you don’t have a system for your records already, it’s time to create one! Trust me, it’ll make your life a whole lot easier and feel much more organised – which is a great feeling! Perhaps you already have a system in place, but is it effective and saving you time? Sometimes systems can end up creating more work – which completely defeats the purpose! Your goal should always be to streamline and get it done faster and easier. If it’s a hassle, you’ll procrastinate on doing it too – meaning a build up of work (read: a stack of accounting to do, come tax time 😉).   

One challenge we often see with clients is when business owners have a CRM, and an accounting system completely separate – and where these systems don’t speak to each other. In this scenario you’ll find that information is being duplicated and can get confusing – and instead of making life easier, you create extra work! So instead of just letting things go – take the time to evaluate what systems you have and if they are truly working in your business so that you don’t have extra to do later on. 

Another big thing to pay attention to is whether your CRM is setup for GST. Some that were created by international organisations may not account for GST, and this can also cause big issues down the track if your invoicing is not accurate. Even if you aren’t at the stage of charging GST just yet, it’s handy to know that your CRM can handle it so that you don’t need to change systems when you do get to this stage.  

Also a super important tip for record keeping in your business is keeping them for five years. These don’t have to be paper, they could be electronic. But, as a business owner you need to make sure you are keeping everything. That means, if you commit to taking photos of your receipts and load them into a system like Xero – it’s best if you do ALL of your receipts that way, rather than half and half.  

Our last tips for record keeping is our personal preference – use an app where you can take photos of your receipts rather than keeping paper copies. This way you can ensure that it’s always saved, even if you lose the paper copies – or if the ink fades! There are some great apps out there like Receipt Bank. If you do want to keep the paper copies as well – make sure they are stored in one place – like a shoebox or zip lock bag. Our final tip is to separate your records by financial year – and we mean when the invoice was PAID, not when it was raised.  

Phew! Implementing these steps will save you so much time and avoid headaches in the long run. Which will you start by doing next? 

Let’s Talk GST, Goods and Service Tax

Let’s Talk GST, Goods and Service Tax

by | Monday, October 29, 2018 | GST

The biggest question is ‘when do I have to register for GST?’. The textbook answer to that question is you must register when your business reaches sales of $75,000 in the course of 12 consecutive months, 12 rolling months. So this doesn’t necessarily mean a calendar year or a financial year, but 12 months in a row of trading. If you are projected or about to have reached $75,000 in sales you must register for GST. You must for GST. Sales are sales directly to customers. So that’s not including expenses or after expenses. It’s not profit. It’s turnover, customer invoices.

Now, to go into this a little bit deeper the next level of question I get is “Okay. I understand I have to register when I hit 75, but in my business should I register earlier?” The answer to that question depends on your business. Once you do register for GST, this means that every quarter you’re going to have to lodge business activity statements or bass returns with an Australian taxation office.

If you are a small business that hasn’t invested in accounting software yet to help you calculate your GST for your bass return, then this could become a burden. So in that situation, you might not want to register for GST yet if you don’t have to. Another situation where you might want to wait to register is if you feel like your sales aren’t going to reach 75,000.

If you are fitting out a store and you have a lot of start-up expenses that are going to have GST on them, then it may be worth registering early before you hit 75,000. That way you can claim back any GST paid on your start-up costs. If you have to fit out a restaurant or a café or a salon, this could definitely help you. Claiming back 10% of your fit out costs or your start-up costs is just one benefit to registering.

Another benefit to registering is that because you’re going to have to lodge your activity statement every quarter, you’re going to be forced to look at your numbers at least four times a year.

Businesses who want to grow in scale definitely need to look at their numbers so they can make decisions based on facts. What do I mean by that? It’s really common for business owners to know the balance that’s in their bank account at any given time. But what a lot of business owners who don’t look at their numbers very often don’t know is how much cash comes in and how much cash goes out during the month. Also, where does that cash come in from? And where does it go out to? How much of your cash is spent on operating expenses, overheads, direct sales or product costs? Unless you’re sitting down and looking at your numbers, these are normal questions that you might not know the answer to. And so registering for GST early is an opportunity for you to get closer to understanding the financial health of your business