How Do Bookkeeping Services Help Small Businesses?

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It can be overwhelming to take care of back-office responsibilities like bookkeeping while still focusing on growing your business. Online bookkeeping services for small businesses can help. 

Bookkeeping services for small businesses should do more than help you track financial records accurately. A professional bookkeeper can keep track of all transactions, reconcile bank statements, prepare financial reports, and more. By depending on professionals with greater bookkeeping and accounting knowledge, you reap the benefits of their expertise. 

This post will reveal the key benefits of bookkeeping services for small businesses. But before then, let us look at what bookkeeping entails.

Table of contents

What Is Bookkeeping?

In the business world, bookkeeping is the process of recording and organising financial transactions. It is an integral part of accounting, focusing on recording daily business transactions in the books of accounts. These include sales, purchases, taxes, loans, investments, payroll, operational expenses, etc.

Bookkeeping establishes the accounting groundwork. In other words, accounting focuses on analysing the data collected from bookkeeping. This process allows business owners to know their financial position, detect financial problems early and fix them before they grow into full-fledged disasters. How you do your bookmaking determines the accuracy of the overall accounting process. Thus, it is vital to hire a qualified bookmaker to do the job.

7 Benefits of Bookkeeping Services for Small Business

The benefits of outsourcing bookkeeping services for your small business are unmatched. Besides helping you organise and analyse financial information, you can accurately conclude the financial health of your business. These are not the only reasons bookkeeping is essential for a small business. 

The Australian Taxation Office (ATO) expects all businesses to maintain specific records and utilise accounting practices to track income and expenditure. Without accurate bookkeeping, tracking and reporting appropriate information to the ATO can be difficult. Here is a detailed overview of how bookkeeping services help small businesses. 

1. Makes You Prepared for Tax Time

Every business has to lodge a tax return at the end of the tax year. Tax deadlines are very strict, and lodging can be time-consuming. With a bookkeeping process in place, your financial information will be ready on time. That way, you won’t need to scramble for receipts and invoices with the taxman breathing down your neck. 

2. Enhances Accurate Budgeting

Outsourcing a bookkeeping service makes it easier to budget for the business accurately. With proper organisation of your income and expenses, it’s straightforward to review your costs and financial resources. A budget defines the financial roadmap for your business, helping you plan for the future by creating a manageable budget. 

Comparing your budget and the actual financial data is a perfect way to detect cost reduction opportunities or potential cash flow issues. If your financial books are inaccurate, it’s hard to make accurate budgeting since it will all be guesswork. 

3. Promotes Better Decision Making

As a business person, you need to clearly understand your finances to plan your company’s future effectively. You may have to make significant decisions like opening a new location or hiring a new employee. To make such decisions with confidence, it’s critical to understand your company’s financial performance. 

Accurate bookkeeping with the help of a professional offers up-to-date information, helping you make informed decisions. If the reports say that your business is running out of capital, you can opt to take a loan to boost development. 

4. Maintains Organised Records

The stress of trying to find a crucial document at the last minute can lead to missed deadlines and possibly a few errors. One thing a business can’t afford to do is make mistakes, as it could lead to costly consequences. A bookkeeping service can help with that! It will keep your books updated throughout, and help you maintain organised records. That way, it will be easier to find any information you need in no time.

5. It Helps You Focus on Other Business Operations

If you decide to do bookkeeping on your own, you will spend much of your time paying invoices, processing payroll, and tracking expenses. As a result, you will have insufficient time to attend to other operations. A bookkeeping service allows you to focus on what you do best. Having enough time to focus on operations enables you to grow your business effectively and gives you ample time for research and development plans.

6. Lowers Costs

Every business owner aims to reduce their overall costs of operations. One way of achieving this is minimising the salaries and wages of workers by employing only a few. An in-house bookkeeper requires a significant salary and benefits, but it’s possible to do without them. The cost of hiring a third-party bookkeeping service can be relatively lower, and you will have an assurance of excellent services. 

7. Avoids Conflicts of Interest

It can be risky to entrust bookkeeping and accounting to one of the owners in partnership businesses. Misconduct accusations can potentially ruin the relationship even when a record-keeping error is unintentional. If something goes wrong, the other members might question the intentions of the person responsible. 

Hiring an independent bookkeeping service helps avoid these inconveniences while boosting confidence among the owners. They can have faith that every financial statement is true, accurate, and unbiased.

What Bookkeeping Method Should You Use?

One of the first steps to bookkeeping for small businesses is to decide which method you should use. The method you choose may depend on various factors, including the amount of revenue you earn and the volume of daily transactions your business processes. 

Below, we discuss two of the most popular bookkeeping solutions for small businesses—single-entry and double-entry bookkeeping.

Single-Entry Bookkeeping

A single-entry system tracks all income and expense transactions. That means each transaction is recorded once and posted to the appropriate account. 

For example, if you receive $1,000 from a client, you would enter this into the “Sales” account. This method is ideal for businesses with low volumes of sales or purchases. However, it does not support a detailed analysis of past transactions.

Double-Entry Bookkeeping

As the name suggests a double-entry bookkeeping system tracks all transactions twice. In addition to recording the original entry, it posts the same transaction to both accounts. 

For example, if a customer pays you $1,000, you would first record (debit) the transaction in the Sales account. Then, you would also post the payment to the Customer account (credit). This method supports a more detailed analysis of past transactions because you can access information about previous entries. It also provides better visibility into cash flow.

How to Do Bookkeeping for Small Businesses

Bookkeeping tasks may include: entering transactions, reconciling accounts, analysing financial data, and creating monthly financial reports. Hiring a professional bookkeeper with extensive experience in the field can save you time and improve your business decision-making.

Bookkeeping for a small business requires these three steps: 

Track Each Transaction

The first step in any bookkeeping process is tracking each transaction. The bookkeeper needs to know what type of transaction it is – whether it’s a purchase, sale, receipt, or withdrawal. They must also determine which account to put it in. After entering the transaction, the bookkeeper must ensure that it is correct. This includes verifying the date, amount, and source of funds.

Accounting software like Xero and MYOB can help speed the process along. 

With tools like Xero, bookkeepers create invoices, bills, receipts, and other documents. An experienced bookkeeper has the knowledge to help your business use these tools accurately and effectively. 

Manage Bank Reconciliations

Tracking every transaction goes hand in hand with bank reconciliation. 

Bank reconciliation is the process of matching or comparing the balances in your accounting records against the actual balance in the bank. If there are discrepancies, the bookkeeper must find out why. Some common causes include incorrect debits or credits, missing transactions, or duplicate entries.

The bank reconciliation process is pretty straightforward. First, it involves obtaining the bank’s ending cash balance and adding any deposits in transit from your business. Afterward, the bookkeeper subtracts any funds not yet cleared by the bank and adds or deducts any other items. 

The second part of the reconciliation process involves obtaining your business’s closing cash balance, subtracting any bank fees, penalties, or NSF (non-sufficient fund) checks, and then adding any interest earned. In the end, your company’s adjusted cash balance should match the bank’s closing balance. 

Prepare Financial Statements and Reports

Financial statements provide information about your company’s performance over a specific period. Reports help you analyse your finances and make informed decisions based on the data.

At best, your business should prepare financial statements at the end of each month or quarter. This may include an:

  • Income statement
  • Balance sheet
  • Profit and Loss
  • Cash flow analysis

Visory’s bookkeeping services extend beyond tracking transactions, bank reconciliation, and financial reporting. 

We also offer accounts receivable, payable, payroll, and other support that growing businesses often need. Whether you’re looking for a simple bookkeeping service or one that covers everything, we have what you need.

What to Look For in a Bookkeeping Service

An online bookkeeper is typically an individual with relevant experience in accounting services offered to a diverse range of businesses. When looking for a bookkeeper, choose one that is well-acquainted with your business type and preferably industry. Look for those that specialise in helping small businesses like yours. 

Their service should portray excellent skills and experience to determine profits, losses, turnover, and other financial factors. This will help you determine the financial health of your business with ease. 

Bookkeeping Services for Small Businesses

Visory is a reputable bookkeeping company that gives you access to accounting and finance services that scale with your business. Our team of experts has experience in different industries and is ready to hit the ground running anytime. You will receive strategic reporting and insight to drive growth. Our monthly subscription fee is affordable and worth the investment. Contact us now to book a meeting.

What’s the Difference Between Payroll and Bookkeeping?

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No business gets far without sound financial infrastructure. Up-to-date and accurate payroll, bookkeeping and accounting practices help set the foundation of a successful business. So, it is important to understand the difference between payroll and bookkeeping and how, along with accounting, they contribute to your financial health. 

Software has simplified parts of the process, but it has not fully automated bookkeeping, payroll, and accounting tasks. Whether it’s an error preparing payroll payment register summaries or distributing payslips, any glitch can throw financial records off, so it’s important to hire the right expert.

Although many bookkeepers do payroll, by no means are all bookkeepers payroll experts. At Visory, we have a separate payroll team taking over these responsibilities. 

In this guide, we’ll go over the basics of payroll, bookkeeping and accounting. We’ll outline the tasks each may do, and the role each plays in your business. 

What Does a Payroll Expert Do? 

Payroll is the process of verifying and distributing payments to employees at the agreed rate and in accordance with designated award rates. The process might appear straightforward and easily automated, however, it’s an easily tangled process that can require skilled financial experts as well as Human Resources to ensure it is completed without issue.

Payroll Tasks

The tasks that a payroll expert completes may vary slightly depending on if you’re outsourcing payroll or hiring in-house. It also depends on the details of your service agreement. However, these are a few of the common tasks and responsibilities. 

  • Make sure all payroll transactions get processed efficiently and at the correct times
  • Calculate, collect, and record data to manage and track payroll information and balance sheets
  • Compile summaries of earnings, deductions, disabilities, taxes, benefits, leave, and non-taxable earnings for financial statements, audits, and more
  • Resolve payroll discrepancies
  • Follow regulatory payroll policies and procedural operations for compliance
  • Manage PAYG withholding
  • Reconcile payroll tax 
  • Set up single-touch payroll
  • Note total gross award rates of the payment register YTD report
  • Contribute to superannuation funds on behalf of employees
  • Implement ad hoc operational and financial reporting as required

Payroll Checklist

To keep payroll accurate, businesses need to collect and confirm employee details like those listed below. 

  • Have confirmed employee details
  • Legal name and address 
  • Date of birth 
  • Tax file number
  • Start (and termination date) of every employee
  • Details of account they want used to receive wages
  • Track pay details such as allowances, gross wage, hourly award, etc.

What a Bookkeeper Does

Bookkeepers manage many of the everyday financial needs of a business, from tracking cash flow and reconciling your accounts to updating your books and creating standard financial reports. 

Although bookkeepers are not the same as accountants or payroll experts, occasionally, a bookkeeper may perform some payroll or accounting tasks. Although, it is important to note that performing actions like lodging a tax return requires additional certification, such as becoming a BAS agent. If you’re considering hiring a bookkeeper, consider what types of tasks you need and their area of expertise. 

Bookkeeper Tasks

Here are a few common tasks bookkeepers may handle.

  • Pay suppliers, vendors, subcontractors, etc.
  • Produce, record, and track invoices for provided services or goods sent to clients
  • Bank reconciliations
  • Document customer receipts
  • Prepare financial reports like balance sheets 
  • Manage accounts receivable and payable
  • Track depreciation

What’s the Difference Between Payroll and Bookkeeping? 

Although a bookkeeper may complete some payroll functions, the two roles are different. Now that we’ve covered each in detail, let’s look at how they differ. 

In their most basic form, payroll and bookkeeping are different because they manage different functions within an organization. 

  • Payroll: The process for paying and managing award rates to staff.
  • Bookkeeping: The day-to-day management of the company’s finances.

Accounting is also sometimes used interchangeably with payroll and bookkeeping. It is key to understand these differences as well, especially if you are considering hiring an expert to help you with your business finances. 

What an Accountant Does

Accountants are advisers who produce financial reports and offer financial advice. They prepare tax returns and ensure taxes get paid on time and properly. So that the business is stable, accountants evaluate operations and recommend best practices, spot issues, and develop solutions to help the organisation run more effectively.

Accountant Tasks

Here is a brief list of many tasks an accountant might be responsible for daily.

  • Ensure the accuracy of the company’s accounting tax records
  • Make sure any financial transaction complies with relevant laws and regulations such as the Corporations Act
  • Prepare, report, and maintain important financial reports
  • Put together tax returns and see that taxes get paid properly and on time
  • Offer counsel on revenue enhancement, cost reduction, and profit maximization
  • Assess forecasting and risk analysis 

Why You Need Payroll and Bookkeeping Experts

An error in your financial records can impact your entire operation and knock the business off its game. A skilled bookkeeper can help you strengthen your business acumen, whether that be choosing the right bookkeeping software or analysing your financial data to identify areas of growth. 

With Visory, you can be confident that your bookkeeping and payroll system is efficient, effective, and agile.

As professionals, we know small errors turn into large problems so we scrutinise every line to ensure accuracy. 

Whether you are an international enterprise or a growing business, managing payroll and bookkeeping on your own can feel like a daunting task. Visory’s team of experts understands the differences between payroll and bookkeeping and can help you assess what your business needs. If you’d like to learn more about identifying the best ways to improve back-office practices, contact Visory today.

Bookkeeper Salary: How Much Does a Bookkeeper Cost?

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If you plan to hire a bookkeeper, one of the first questions you’ve probably asked is how much does a bookkeeper cost? Bookkeeper salary or cost for bookkeeping services can vary widely, depending on the type of service, experience, qualification, location, and more. 

The various pricing models—hourly rate, monthly fee, and salary—will also determine how much a bookkeeper costs. 

In this guide, we’ll compare pricing models, cost for bookkeeping services, and other factors. We’ll also dive into how much a bookkeeper costs, how bookkeepers charge businesses for their services and when hiring a bookkeeper is worth it. 

How much does a bookkeeper cost in 2023?

The average bookkeeper salary ranges from $60,000 to $80,000 or more, not including benefits and other costs. 

The hourly rate for a bookkeeper in Australia ranges from $100 to $150 per hour, but can also be more depending on the experience and tasks. 

Outsourcing to an online bookkeeping service, often a cost-effective option, has a set monthly fee that ranges from $500 to $2,500, depending on business size and task complexity.

Although these are the averages, the actual cost of a bookkeeper varies depending on a number of factors. Let’s dive into each factor. 

How much do bookkeepers charge businesses? 

Mainly, bookkeepers use any of these three models to charge businesses—salary, hourly rate, and monthly set fee. To help you choose the right model, let’s look at how each works.

Salary – employee

A salaried bookkeeper is usually an in-house employee. They may work full-time or part-time, depending on your arrangement. 

A full-time bookkeeper is ideal for large, international companies with frequent transactions. For example, public companies usually have full, in-house accounting and bookkeeping teams. They also tend to produce annual revenue that’s well over $100 million, so there’s more funding to support it. 

An in-house bookkeeping team can provide time and support to focus on revenue-generating activities, but there are significant costs to consider too. 

  • Base bookkeeper salary
  • Cost of hiring and retaining in-house talent (salary, allowances, training and development costs)
  • Office space and equipment expenses
  • Bookkeeping software costs

In-house bookkeeper salary ($60,000 – $80,000)

The annual salary of a bookkeeper ranges from $60,000 for entry-level to $80,000 for experienced. The median bookkeeper salary is $67,500.

Even if you hire a bookkeeper part-time and spend half the cost of the industry average, it would be about $35,000. Either way, the cost is quite substantial, considering you still need to pay for accounting and tax services.

Generally, the decision to hire an in-house bookkeeper isn’t for cost-cutting purposes, but it can come with its benefits. If your situation doesn’t require an in-house resource, outsourcing bookkeeping usually makes more sense.

Hourly rates – sole traders, freelancers, and consultants

If you engage a sole trader, consultant or freelancer as your bookkeeper, they usually charge hourly rates. The rates vary based on the types of tasks and the expertise you need.

Hourly bookkeeper rates are generally cheaper than bookkeeper salaries because contractors tend to use them. Since a contractor isn’t an employee, you don’t have extra costs for employee benefits and training. You also don’t have to pay for office space and equipment.

However, some freelancers may take advantage of this model. Without an incentive to automate tasks and create efficiencies within your back office, they can drag hours out to increase their earnings. 

Hourly bookkeeper cost ($100-$150 per hour)

Hourly bookkeeper costs add up fast. For example, for 20 hours of basic bookkeeping tasks at $150 per hour, you could easily pay $3,000 per month. During busy months or tax season, you could expect to pay even more. 

Another drawback of hourly bookkeeping rates is that it’s hard to budget for each month when your bookkeeping hours (and costs) fluctuate.

Set monthly fee – bookkeeping service 

Online bookkeeping service providers such as Visory offer a monthly set fee. It’s often the most cost-effective of the three models. You can choose from a range of pricing plans and select one that fits your bookkeeping needs and budget. 

For instance, Visory offers three different plans starting at $545/mo. The most basic plan has features such as: 

  • An expert bookkeeper
  • Real-time, accrual-based accounting
  • Monthly statements (P&L, balance sheet, and cash flow)
  • Quarterly business activity statement
  • A receipt and invoice capture tool

Cost for bookkeeping services (monthly fee – $545-$2,500)

Outsourcing is the best alternative if you don’t have the budget or need for an in-house bookkeeper or you simply want to cut down on employee costs. You could also opt for online bookkeeping services instead of hiring freelancers at hourly rates. 

Since online bookkeeping services charge a flat monthly fee, you know exactly how much you need in your budget each month. Monthly, in-house bookkeepers cost about $5,625, while most outsourced online bookkeeping services are a fraction of this (about $500-$2,500 per month). 

Remember, cost is only one factor to consider. Online bookkeeping services have more flexibility than in-house or freelance bookkeepers. If your business grows rapidly, you don’t have to worry about hiring more talent. Because bookkeeping services have teams of bookkeepers on-hand, they can more easily and quickly scale with you. 

To recap, here’s a comparison of the costs for bookkeeping services based on salary, hourly, or monthly rates. 

Type of pricing Bookkeeper  Average cost per month
Salary In-house employee $5,625 per employee
Hourly Freelance, sole trader $3,000 per month
Monthly fee Bookkeeping service (Visory) Starting at $545 per month

Bookkeeping cost and rates

Besides the contract type, other factors may affect the cost of a bookkeeper, such as: 

  • Location
  • Qualifications
  • Level of experience
  • Type of services
  • Frequency of service
  • Size of your business

When it comes to location, bookkeeper salary and freelancer rates can vary significantly due to cost of living. A report by Indeed shows the average annual salary for a Sydney bookkeeper is about $68,002. On the other hand, the average salary for a Perth bookkeeper is around $63,772. 

Tasks and rates

As mentioned earlier, the cost for bookkeeping services can vary by task. Generally, they should handle the below tasks.

  • Data entry (record and classify transactions to the appropriate accounts on the accounting software)
  • Bank reconciliation (download bank statements and reconcile the accounts)
  • Invoicing (prepare, send, and track invoices)
  • Track expenses
  • Generate reports
  • Manage accounts payable and receivable
  • Other additional duties as their skills allow

More complex bookkeeping and accounting services come with a higher cost. More complex bookkeeping and accounting services, such as BAS Lodgements, come with a higher cost.

Bookkeeping experience and qualifications

The experience and qualifications of a bookkeeper impact their salary significantly. 

For instance, an entry-level bookkeeper should handle data entry, invoicing, tracking expenses, generating reports, and bank reconciliation. If they are skilled in BAS and financial statements preparation, you should expect to pay more, and so forth.

Before hiring, familiarise yourself with the different bookkeeper levels and the duties they can perform. At the same time, look out for their qualifications to help identify the right candidate. 

An entry-level bookkeeper should have a Certificate IV in Accounting and Bookkeeping. But to provide business activity statement (BAS) services, they need additional qualifications and experience. These include:

  • Experience – 1400 hours of relevant work
  • Registered BAS Agent with Tax Practitioners Board

In addition to the above work and education requirements, sole traders, contractors and outsourced providers must hold Professional Indemnity (PI) Insurance.

How hiring a bookkeeper saves businesses money

Maintaining your books might seem manageable initially, but keeping tabs can be challenging as your business grows and transactions increase. Having a bookkeeper or bookkeeping service handle the books keeps you compliant and frees up your time to focus on your main objective – generating revenue. 

But that’s not all. Hiring a bookkeeper can save you money in many ways – here are a few of them.

Spend less on accounting

A professional bookkeeper can handle more tasks than you would if you did it yourself. They can keep your books clean and organised, so you spend less time and money on accountants. A bookkeeper can handle this as part of their normal duties, thereby saving what you would spend on accounting services, which are a little pricier. 

Bookkeepers are more affordable 

Bookkeepers can help you perform some tasks at a far lesser cost than if you were to hire an accountant to do it for you. For instance, some bookkeepers can handle payroll processing, accounts payable, BAS, and prepare financial statements. Generally, they charge less than accountants, meaning you can save significant money.

Focus on activities that generate revenue

Hiring a bookkeeper to handle your books frees up your time and ensures back-office tasks are completed at the highest standard. While you incur the cost of their services, it frees up your time, allowing you to focus on growing your business. 

As you bring in more business, the revenue covers the bookkeeping service cost. You also get more time to rest, which minimises the risk of burnout and its potential effect on your business. 

More accuracy

Another benefit of a professional bookkeeper is that they’re responsible for keeping your books updated and accurate. With many duties demanding your attention, the risk of making errors is always present. In addition, a bookkeeper is conversant with how to treat different transactions, which can eliminate compliance-related mistakes. 

Moreover, their advanced bookkeeping knowledge allows them to be more efficient than you would be performing the same tasks. All these factors contribute to savings for your business.

Easy tax lodgements

A bookkeeper helps track transactions and keep your records up to date. Consequently, you spend less time on tax preparations. They also ensure all the necessary documents are accurate and organized for smooth tax payments and return lodgement.

Get a team of bookkeepers and scale your business

Understanding how much a bookkeeper costs can help you choose the best option for your business. No matter the stage of your business (startup or enterprise), a bookkeeper can handle your books and free up your time, so you can concentrate on growing your business. 

Outsourcing is a cost-effective bookkeeping option for small and large businesses. You can find freelancers at a fraction of the cost of an in-house bookkeeper salary, but an online bookkeeping service makes more financial sense. Besides being less expensive than the other two, you get to work with a dedicated team of experts.  

Learn more about us and see how much bookkeeping services cost (and how much you can save), when you use Visory as your online bookkeeping service. 

 

 

How Much Can You Claim for Laundry and Clothing?

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It’s a question we’ve all asked in our lives when doing our first tax return. Looking down the list of tax deductible expenses your eyes are instantly drawn to it—Uniform & Laundry Expenses. If you’re living at home, you’re most likely outsourcing your laundry to your parents. But as most of us have done, you really want to know if you can claim anything to maximise your return.

Luckily the answer is yes in many circumstances. In Australia, you can get a tax deduction for work clothing and laundry expenses. However, it has to meet particular requirements to qualify as work-related clothing. It can be difficult to navigate all the guidelines, so we commonly get questions like: 

  • Can I claim work uniforms on taxes? 
  • How much can I claim for laundry expenses? 
  • Is dry cleaning and clothing repair deductible? 

In this guide, we’ll dive into work-related clothing and laundry expenses. We’ll also outline what qualifies for a deduction, how much you can claim for laundry, and more. 

What Can You Claim as a Laundry Expense? 

For taxation purposes, clothing and laundry expenses refer to the cost of buying, repairing, and cleaning work-related gear (garments and footwear). 

According to the Australian Taxation Office (ATO), you can claim any expenses you incur to clean specific work clothing. Mainly, the deduction includes the cost of washing, drying, and ironing the clothes. However, the expense is not allowable if the employer launders the clothes for you or reimburses for the cost incurred.

The amount you can claim depends on whether you launder the clothes at home, at a laundromat, or at the dry cleaner (see later section for more details). In addition, any repair costs for the eligible gear are part of the deduction. 

Types of Clothing You Can Claim

While taxation laws allow deductions for various categories of work-related attire, any conventional or everyday clothing you wear to work does not qualify for the laundry deduction. 

Work clothing that may be eligible falls into four categories.

  • Occupation-specific clothing
  • Protective clothing
  • Compulsory uniforms
  • Non-compulsory uniforms

Occupation-Specific Clothing

Occupation-specific clothing refers to work attire that specifically identifies you with a particular profession. These are mainly distinct uniforms that employees would not wear in everyday situations other than their jobs. 

For instance, let’s say your business’ dress policy requires employees to don navy blue suits and light blue shirts and blouses. You cannot claim the cost of purchase and maintenance as a tax deduction under occupation-specific clothing since the attire can be worn in multiple professions. 

However, a nurse or doctor who wears scrubs may claim laundry expenses since they are unique to their occupation. (They may also be able to claim non-slip shoes as protective clothing.)

Examples of Occupation-Specific Clothing

  • Chequered pants of a chef
  • Judge’s robe
  • Nurse and doctor scrubs 

Generally, any dresses, jackets, blouses, skirts, pants, and other items of clothing that are worn distinctly by members of a specific profession could qualify.

Protective clothing

Protective clothing is any attire worn during work to protect you from risks (injuries, illnesses, etc.) or protect the clothes from damage. In other words, the nature of your work requires you to wear them. According to the ATO, the items must have protective features and functions to qualify for deductions. 

However, they must not be everyday wear. Even if they have protective features and can be used for everyday wear, you cannot claim laundry expenses on them. For example, a building site worker who wears a long-sleeved shirt to protect their arms from abrasions, may not claim the shirt.

Examples of Protective Clothing 

  • Fire-resistant clothing
  • Aprons
  • Sun protection clothing
  • Smocks
  • Safety-colored vests
  • Non-slip nurse’s shoes
  • Overalls
  • Boiler suit
  • Safety boots
  • Goggles

Compulsory Work Uniform

Compulsory work uniform refers to attire that is mandatory to wear while on duty. Often your employer has a clearly defined work policy in place, making it mandatory for you to wear the particular attire while on duty.

The ATO classifies compulsory work uniform as attire that is:

  • Specific to your organisation 
  • Used to identify the products or services your organisation offers

However, if your employer requires you to wear a certain type of clothing, which can double up as conventional clothing, you cannot claim expenses. Unbranded black pants and white shirts worn by hotel staff would not qualify as an expense.

Examples of compulsory work uniforms

  • Police officers’ uniform
  • Military personnel uniform
  • Airline staff uniform
  • Nurses’ uniform
  • Embroidered supermarket staff uniform

Non-Compulsory Work Uniform

Non-compulsory work uniform refers to employee work gear that’s not mandatory to wear at work. Most non-compulsory work uniforms do not qualify for a deduction, with one exception.

To qualify for laundry expense deduction, the employer must register the design with the Textile, Clothing and Footwear (TCF) Corporatewear Register. Some key elements required for registration include identifiers, patterns and colours. 

Example of Non-Compulsory Work Uniform

  • A bus company registered employee uniform that’s not compulsory for the employees to wear to work

Note that you cannot claim a single item, like a jacket. The clothing must be a complete outfit such as a:

  • Dress
  • Skirt and blouse
  • Trouser and shirt
  • Suit 

How Much Can You Claim for Laundry?

As earlier mentioned, if your employer does your laundry, you cannot claim the expense. The same applies if they reimburse for the cost you incur. 

However, if you did the laundry either at home, at the laundromat, or dry cleaner, you can make the deductions against your taxable income as follows:

At Home Laundry

  • $1 per load (eligible clothing)
  • 50c per load (if the load contains eligible clothing plus personal items)

At Laundromat

  • $1 per load (eligible clothing)
  • 50c per load (if the load contains eligible clothing plus personal items)

Dry Cleaning and Repairs

  • The entire expense paid

Note that the deductions are allowable even if an employer pays you a laundry allowance.

How to Claim Laundry Expenses

To claim laundry expense on your tax return, the ATO requires you to provide evidence of the expense if it exceeds $150 per year.

If you’re doing the laundry at home, you should keep a diary of the number of loads you washed during the year. But if you took the laundry for dry cleaning, you should provide a record of the receipts and invoices. However, you can claim the expense without supplying evidence if the amount is less than $150. 

For the repairs or dry-cleaning service, the record should contain the following details;

  • Name of the service provider
  • Repair/laundry date
  • Details of the item repaired or laundered
  • Amount paid for the service

The ATO allows you to claim laundry expenses for eligible work-related clothing. They categorise the eligible items into occupation-specific clothing, protective clothing, compulsory work uniforms, and registered non-compulsory work uniform.

If you’re doing the laundry at home or the laundromat, you can claim $1 per load or $ 50c if you launder the clothing alongside other items. 

For repairs and dry cleaning, you can claim the entire expense. To qualify for the deduction, you must provide evidence of the costs if they exceed $150 per year.

Visory can help you maintain your business records and have them organised and ready when it comes time to lodge your taxes. Contact us today and learn how we can help get your books in order.

What Are The Generally Accepted Accounting Principles?

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Many finance and tax rules change by country, but in the world of accounting, some principles remain the same. For example, publicly traded companies in the United States use Generally Accepted Accounting Principles or GAAP. However, many Australian, public companies that operate in the US, and elsewhere may find them useful to know. You may also be wondering how GAAP relates to Australian accounting principles. 

If you are managing your books, it is important to know what best practices you should follow. Let’s dive into Australian accounting principles and GAAP. 

What Are Generally Accepted Accounting Principles?

Generally accepted accounting principles (GAAP) are a set of standards and accounting rules U.S companies use to create their financial statements. These standards ensure companies follow similar accounting conventions, giving investors a basic consistency when comparing financial records. 

GAAP sets guidelines for a range of topics from financial statements to assets, liabilities, foreign currency, equities, revenue, expenses, and more. That said, there are ten GAAP principles:

  • Regularity
  • Consistency
  • Sincerity
  • Permanence of methods
  • Non-compensation
  • Continuity
  • Prudence
  • Periodicity
  • Utmost good faith
  • Materiality

What Are Australian Accounting Principles? 

U.S. companies adhere to GAAP, but firms in other countries follow International Financial Reporting Standards (IFRS). Public companies in the US must meet GAAP accounting standards. While global companies in other countries like the UK must follow IFRS as well as their base country’s standards when creating financial statements.

For Australian companies, the Australian Accounting Standards Board (AASB) establishes generally accepted accounting principles for use by local and state governments. Australian public companies must comply with AASB accounting principles. 

The 10 Principles of Accounting

To better understand GAAP and Australian accounting principles, let’s dive deeper into the ten principles of accounting. 

1. Accrual Principle

The accrual principle requires that you record transactions in the period they happen, regardless of when the cash flow for the transaction is received. For example, you record sales and expenses when they take place rather than when cash changes hands. 

Suppose you are an architect and send an invoice for a project you’ve done. In that case, you should record it in your accounts receivable immediately when you send the invoice, not wait until you receive payment. The accrual principle is behind the accrual accounting method. 

Accrual accounting suits business owners who don’t receive payment straight away. It also shows your true financial position by tracking what others owe you and what you owe others. However, it can be more complicated than cash accounting.

2. Conservatism Principle

The conservatism principle refers to recognizing liabilities and expenses as soon you discover them. Contrastingly, you only record revenue when you are sure you will get it. The idea is to factor in the worst possible outcome in your company’s financial future. 

If your business predicts a loss, the conservatism principle suggests that you record the loss and amplify its potential impact. Conversely, if you are uncertain about receiving revenue in your small business, ignore the revenue until you get it. 

If you estimate uncertain revenue and loss in your company, you understate revenue and overstate losses. As a result, you become cautious when making decisions since you expect a lower net income. 

However, understating and overstating financial periods can complicate tracking finances in your business. Plus, this principle is open to interpretation; businesses can easily be tempted to manipulate it to their advantage. 

3. Economic Entity Principle

This principle states that business owners should separate the company’s transactions from their personal financial dealings and those of investors. 

The financial records of each entity should also be distinct. For example, if you own businesses A and B (or a parent company with several subsidiaries), each entity should have separate financial statements. 

The economic entity principle prevents personal and inter-organisational compounding of assets and liabilities, which would confuse business auditors. 

4. Cost Principle

The cost accounting principle is the concept whereby a company records assets, liabilities, and equity investment at the original buying cost. In short, the principle states that you record costs at the actual price you paid for an item. On top of that, the company should not adjust cost-related financial information with depreciation or inflation or market value improvement.

Here’s an example illustrating how the cost principle works. 

Business Z bought a property for $275,000 in 2018. In 2020, the property’s market value increased to 350,000. In this case, business Z cannot adjust the property’s cost to reflect the current market value. 

However, there are some exceptions to the cost principle. For example, a business should record highly liquid assets (stocks and bonds) at their current market value rather than the original cost. 

This principle eliminates the trouble of adjusting your books now and then with the current market prices. However, it can result in an investor undervaluing your business if your assets have increased in value since the initial purchase. 

5. Monetary Unit Principle

The monetary unit principle states that you only record transactions that are expressible in terms of a currency. That means you can’t record non-quantifiable items like employee talent and customer service quality. 

While the monetary unit principle simplifies quantifying business transactions, it has one big drawback. It doesn’t consider inflation and a currency’s purchasing power. 

For example, the dollar’s purchasing power could increase or decrease in the future, depending on inflation. The monetary unit principle assumes that the currency you use to record transactions remains stable over time. 

6. Time Period Principle

The time period principle states that a company should report its finances over a specific period, usually annually, quarterly, or monthly. The goal of the time period principle is consistency. 

Consistent reporting for similar periods simplifies comparing your current financial status with those of the previous years. Hence, investors and lenders can make financial decisions faster.

7. Full Disclosure Principle

As the name suggests, the full disclosure principle requires businesses to include all essential financial data in their financial records. Your accountant should include all necessary financial information that may influence a person’s or institution’s judgment when deciding to lend or invest in the business. 

The full disclosure principle provides external entities with crucial details when evaluating a company’s potential success. 

8. Going Concern Principle

The going concern principle applies to businesses that expect to operate for the foreseeable future. It assumes that the businesses can generate revenue, meet their obligation, and don’t plan to liquidate soon. 

If you prepare financial statements using the going concern accounting principle, you can defer some prepaid expenses (depreciation) to a later date. 

9. Matching Principle

The matching principle requires a company to record expenses and related revenues together in the same reporting period. If an expense doesn’t directly link to revenue (depreciation), the company should record the expense’s effects throughout the years. Here are examples for better clarity. 

Example 1: A company acquires a machine for $100,000 with a useful life value of 5 years. In this case, the company should charge the machine’s cost to depreciation expense per year for five years. This ensures the business recognizes the depreciation expense over the machine’s life. 

Example 2: A salesperson earned a 5% commission on sales a company shipped and recorded in February. The commission is to be paid in March. The company should record the commission expense in February. That way, the company records the expense in the same month as the associated sales. 

The matching principle applies to businesses that use accrual accounting. 

10. Revenue Recognition Principle

This accounting principle states that you should record revenue as you earn it—not only after collecting cash. In other words, you record revenue when products or services are delivered, not when you receive payment. For example, business X sells products worth $100 on credit. 

This principle suggests that the business should immediately record the revenue upon selling the products, even if it doesn’t expect payment for several days or weeks. 

Suppose business X received payment in advance before delivering the goods. In that case, the business should recognize the revenue in their statements after it has been delivered. 

Navigating various global and Australian accounting principles can be complicated. However, it is essential for every business to prepare financial reports and bookkeeping to meet these standards. If you’d like a bookkeeping expert to help you prepare your business, get started with Visory today. We’ll make sure your books are clean and compliant, so you can focus on running your business.

Can You Claim Tax Deductions Without Receipts?

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If you’re wondering what you can claim on tax without receipts, this guide may help. In Australia, taxpayers can claim a deduction for many out-of-pocket expenses incurred while earning their income. These include work-related travel expenses, clothing and equipment costs, union fees, and other professional expenses.

However, the Australian Taxation Office (ATO) requires taxpayers to have a valid record or receipt to claim a deduction. This is to ensure that taxpayers are only claiming deductions for legitimate expenses. But what happens if you are missing receipts? Can you still claim tax deductions without a receipt?

In this article, we’ll look at what the ATO says about tax deductions without receipts. We’ll also outline which items you can claim without receipts and how you should ensure you are following ATO guidelines.

Australian Taxation Office rules for claiming tax deductions

Any expenses you claim on your taxes must meet three primary requirements: 

  • It must be necessary for you to earn your income.
  • You must have been the one who purchased it. Also, it can’t be an expense a company reimbursed you for. 
  • You must prove you purchased it with a record or receipt. 

If you meet the first two requirements, then all you need are the receipts. The ATO is clear on its stance when it comes to claiming tax deductions without receipts. According to the ATO website, “You must have a record of your expenses to show how you calculated your claims.” If you don’t have a valid receipt, you won’t be able to claim the deduction. However, there are some exceptions to this rule. 

What can you claim without receipts? 

For example, if you’re claiming for a work-related expense that costs less than $100, you may be able to use other records (such as your bank statements) to prove your claim. You should still track expenses.

The $300 rule

If you’re claiming for expenses that cost more than $300, you’ll need written evidence (such as receipts or invoices) to support your claim. You must also keep records of your expenses for five years in case the ATO needs to review your case.

Examples of tax deductions

Businesses and individuals can claim deductions on their tax returns. Claiming tax deductions can save you money. It lowers your overall taxable income, so you could end up paying less in taxes. Examples of tax deductions you can claim include:  

Lodging your taxes

Some costs associated with managing your tax affairs are deductible. For instance, if you pay a registered tax agent to lodge your return or provide advice, you might be able to claim the cost as a deduction. Other costs you can claim include: 

  • Travel expenses incurred when you travel to meet with your agent for professional advice
  • The fees involved with preparing and lodging your tax return and activity statements
  • Expenses related to communicating with the ATO on your behalf
  • Any litigation fees, such as court fees
  • Credit/debit card payment fees for business tax liabilities (GST etc.) and debit 

You may also be able to claim expenses associated with obtaining and using materials or software to assist in the process. However, you can only claim part of the cost if you use the software for other purposes besides lodging tax returns.

Car expenses

If you’re using your own car for work purposes, you can claim a deduction for the cost of running your vehicle.

What it includes: 

  • Fuel
  • Oil
  • Repairs
  • Maintenance

You can calculate your claim using the cents per kilometre or logbook method. 

Home office expenses

You can claim a deduction for a portion of your mortgage interest, rent, insurance, and utilities. However, you must be using a room in your house as a dedicated home office. 

Home office expenses include: 

  • Utility, rent, or mortgage costs for the portion your home office uses
  • Internet costs 
  • Stationery and office supplies

Work-related travel expenses

Some work-related travel expenses are deductible. Many businesses reimburse employees for travel costs. So, remember if you’re reimbursed, you can’t claim it on taxes.

What travel expenses include:

  • Airfares
  • Accommodation
  • Car hire

Clothing and uniform expenses

If you’re required to wear a uniform to work or if you need to purchase protective clothing, you can claim a deduction for the cost of these items. 

Education and professional development

You may need to take professional development courses or incur other education expenses for work. As long as your employer didn’t reimburse you for the costs, you can claim a tax deduction.

How to track receipts and expenses 

Tracking your receipts and expenses helps show proof of your expenditure. ATO’s myDeductions app can simplify this process for individuals and sole traders.

However, it’s not suitable for businesses. Instead, businesses should track their expenses with accounting software or receipt tracking via Dext or Xero. Working with an online bookkeeping service can also help you record and organize your expenses and other finances to make lodging taxes easy. 

How can you claim tax deductions without receipts? 

Keeping a record of your receipts is the most straightforward way to claim tax deductions. However, receipts are not the only records that businesses keep to log their income and expenses. 

Here are some examples of records you might also have:

Bank statements 

If you’re working with a bookkeeper, they may already be reviewing your bank statements to make sure your books are accurate. A bank statement will usually show a record of your transactions including the dates, amounts, and suppliers.

Logbooks

A logbook is a detailed record of vehicle usage over a specified period. If you use your car for work purposes, maintaining a logbook can help provide evidence of your claim for vehicle-related expenses.

The ATO will look at the total kilometres driven, how much of that was for work, type of car, and purchase date to determine whether you are eligible for the deduction.

Work Diary

A work diary is a record of work-related activities, often including dates, hours worked, and tasks performed. It can serve as proof of work-related expenses such as long-distance travel or overtime meals, helping substantiate your claims for tax deductions.

What records you can’t use for tax deductions

The ATO has a list of unaccepted proof of deductions, which includes the following:

  • Handwritten notes
  • Oral agreements
  • Estimated receipts
  • Spreadsheets

How do you get the most out of tax deductions?

There are a few things you can do to make sure you get the most out of your deductions.

  1. Keep records: As we mentioned earlier, keep records of all your expenses in case the ATO needs to review your claim. This includes receipts, invoices, bank statements, and wage records.
  2. Know the rules: It’s essential to know the rules around claiming a deduction. This includes knowing which items you can claim without receipts and what evidence the ATO will accept.
  3. Get help: If you’re unsure about something or need assistance calculating your deductions, you can speak to a registered tax agent or accountant.

A registered tax agent or accountant will help you:

  • Understand the rules and ensure you’re claiming deductions correctly.
  • Calculate your deductions so you don’t miss anything.
  • Lodge your tax return and maximise your refund.

At the end of the day, it’s important to remember that you can only claim deductions for expenses that are directly related to your job. However, with the help of a professional, you can be confident that you’re getting the most out of your tax return.

The Bottom Line

You can claim tax deductions without receipts, but you need to show evidence of your expenses through other records such as invoices, bank statements, and wage records. If you don’t have documents to support your claims, you can’t claim the deduction.

Items you can claim without receipts include car expenses, home office expenses, work-related travel expenses, clothing and uniform expenses, and education expenses.

To get the most out of your deductions keep records of all your expenses and know the rules around claiming deductions. If you’re unsure about something or need help calculating your deductions, you can speak to a registered tax agent or accountant. They can help you understand the rules and make sure you’re claiming deductions correctly.

Contact Visory Today

If you need help with getting your books in order for taxes, our team at Visory can help. We are a team of expert bookkeepers who can help you with all aspects of your bookkeeping. We’re here to help you maximise your savings and manage your books. Contact us today to find out how we can help you.

How to Choose the Right Software for Your Business

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In this day and age, there is software for everything. The only software that doesn’t exist, is a software to choose software. *Our legal team will be in touch if you steal this idea.

When running a business, you will be pressured into improving efficiencies and creating automated processes, which software can often provide. However, just as a good software selection can assist your business, poorly chosen software can have negative effects which will waste time and money. Here are a few key pointers we suggest addressing before you make your next software decision.

1. Plan for the Best Usage, Expect the Worst

Don’t be sold nirvana. You will rarely find a business that utilises a software to its maximum potential, and if they do, they’ll still have a laundry list of things they want to fix.

When looking at a new technology for your business, consider what would happen if you only achieved the lowest level of implementation. Will the software provide any value at this stage?

Prime example, the fabled CRM.

If you only use the CRM as a digital contact book, would it still be worthwhile?

This isn’t a tip to reject any software that doesn’t overcome this threshold, rather it’s an early indication on the effort and dedication required to make the chosen software have a positive impact on your business.

2. Take the Time to Quantify Expected Improvements

Many people would have come across an administrative ‘weapon’ throughout their career. Someone who completes standardised tasks, so quickly, so efficiently, you cannot help but watch in awe.

Now imagine you are replacing their tools and processes with a new software that still requires manual input.

Has the time to complete their work been reduced?

Have the reports generated from their work been automated?

What are the immediate benefits of this new software?

Once you dig deep and estimate immediate, as well as future impacts of a software, you might be shocked to find there aren’t any positive ones in the short term. Highlighting this is crucial, not only for planning and implementation, but also change management in your team. Promising a new software that improves workflow and efficiencies, only to deliver a clunky, equally manual software is a bitter pill to swallow and can stunt staff adoption. Extra tip: If your administrative tasks are truly standardised, consider a tool such as UiPath which can perform the same tasks as your administrative ‘weapon’.

3. Pricing Comparisons

Software pricing norms have evolved over time. Fixed terms and unlimited users have made way for flexible engagements that charge by the ‘seat’. Seats can be deceptive.

Our key tip here is short and simple, forecast more seats than you need when comparing prices.

There will almost always be ad hoc requests from senior leadership, new starters, or unaccounted staff to have a seat. So, instead of watching payments balloon, account for additional seats before any engagement and ensure it is still within your price range.

4. Plan for Larger Teams

When deciding on new software, you can often fall into the trap of only finding a software fit for your current team. Avoid this and make sure the software can scale to any size.

Ensuring the chosen technology has collaboration capabilities, access hierarchies and clear audit trails will help your business increase the number of users and teams without costly restructuring required later.

5. Assign Responsibility

Our final and arguably most crucial point is focused on ownership, responsibility, and accountability. When a decision is made to select a software and implement it within your business, you need someone to take ownership for this decision. Notice we say individual and not a team. As the modern-day herald of business Elon Musk discovered, when a business decision is made, individuals must be held to account for the decision, future roadmaps, and the related business activity. If left to a team, responsibility can be handballed, final decisions are often left ambiguous, and points of contact are left scattered.

Choosing the right software for your business can have extraordinary results and having experienced and implemented a range of back-office software to suit many needs, Visory’s team of experts is able to advise software solutions suitable for your business. Minimising the risk of choosing the wrong software, we guide you through selection, implementation, and continual improvements to make your business run seamlessly with as little effort as possible.

Can Bookkeepers Lodge Tax Returns?

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To many people, bookkeeper and accountant basically mean the same thing. They get mixed up on who should do what. But the two terms differ significantly in many areas, despite some overlaps here and there. 

To answer the above vital question, we have to look at the different roles each handles, their educational qualifications, and who to hire based on your business needs. 

And did you know that accountants and bookkeepers can be BAS agents? We’ll also dive into the roles of a BAS agent.

Fundamental Differences Between a Bookkeeper and Accountant

Bookkeepers

A bookkeeper ensures your books are up-to-date and complete. That way, you (the business owner), investors, accountants, or bankers won’t have difficulty gleaning valid and current financial details. 

Make no mistake. Tax preparation isn’t the only aspect of financial tasks. Maintaining current, accurate, and complete books can help you in many ways: 

  • Run your business operations seamlessly
  • Avoid bank overdraft charges
  • Secure funding
  • Boost your business growth 
  • Save money

According to a recent Xero survey, 54% of accountants revealed that their clients don’t keep current books. The result? The accountants have to charge them for extra hours to prepare tax returns. 

What are the Functions of a Bookkeeper?

Every company or organisation generates receipts, purchase invoices, and expense claims. The primary task of bookkeeping is to transform these items into an accurate and orderly record. The bookkeepers can employ a software system to process your business financial transactions. Some (not all) bookkeepers can also prepare tax returns, and run payroll. 

Here are some of a bookkeeper’s duties:

  • Process expense claims
  • Process purchase invoices
  • Issue sales invoices
  • Manage filing and documentation
  • Chase payments from clients
  • Reconcile bank accounts in Xero and other software
  • Post and report journal entries
  • Run payroll
  • Prepare sole trade accounts and self-assessment returns
  • Offer basic tax returns

Bookkeepers’ frequency of working

Your bookkeeper can take care of your books monthly, weekly, or fortnightly. It all depends on your business complexity and size and the level of comprehensiveness you desire. 

Bookkeepers’ education qualifications

Bookkeeping doesn’t have defined qualification requirements that are regulated such as financial planners. However, serious bookkeepers take up studies and join recognised bodies such as the International Association of Bookkeepers (IAB). Vast financial experience in banking and larger firms can often help indicate the expertise and ability of a bookkeeper.

Tax skills of bookkeepers

Some have basic tax skills while others don’t have any, so be sure to ask. Sole traders can hire qualified bookkeepers to prepare accounts, handle tax returns, and perform basic self-assessment returns and tax-related tasks.

Accountants

Accountants’ advice can go beyond preparing taxes. They may advise you on future tax plans and continuous business performance evaluations. For instance, they may give you ideas on boosting operation results and remaining compliant with financial regulations. Therefore, meeting with them at least once per year or quarter (to review your books) is recommended.

What are The Roles of an Accountant?

An accountant’s primary role is to take care of advanced compliance requirements like lodging tax returns and accounts and advise you on strategic business management. They also regularly plan tax strategies to prevent tax liabilities and advise you on managing cash flow. 

Here is a breakdown of their duties:

  • Prepare sole trade accounts and self-assessment returns
  • Prepare limited company accounts
  • Corporation tax returns
  • Calculate capital gains tax
  • Prepare complex self-assessment tax returns
  • Prepare management accounts
  • Prepare business plans and cash flow forecasts
  • Advice on business structure
  • Provide basic tax advice
  • Provide specialist tax advice

Accountants’ frequency of working

An accountant doesn’t work as frequently as a bookkeeper. For instance, they may work on annual accounts or quarterly statements. Your business may occasionally involve them in more specialist tasks such as working on cash flow forecasts and business plans. 

Accountant’s educational qualifications

In Australia, a person aspiring to be an accountant needs higher education qualifications such as:

  • Bachelor of Accounting, Commerce or Business
  • Masters of Professional Accounting
  • Certified Practicing Accountant (CPA) program
  • Chartered Accountant (CA ANZ)

To qualify as an accountant, one must sit for higher-level exams. 

Accountants’ Tax Knowledge

They need to have a vast knowledge of corporation tax, capital gains tax as well as state, federal, and international taxes. You must be sure they’re experienced and knowledgeable enough to handle a particularly complex tax issue. 

A BAS Agent

A Business Activity Statement (BAS) agent manages BAS on your behalf. The agent may be an accountant or bookkeeper with BAS Agent registration. 

The roles of a BAS Agent

BAS agents can offer advice on BAS, lodge your business BAS with the Australian Taxation Office (ATO), or represent you to ATO concerning:

  • All Goods and Service Tax (GST)
  • Payment of Fringe Benefits Tax (FBT)
  • Payroll aspects related to tax amount withholding
  • Income tax payment via PAYGI and more. 
  • Wine Equalisation Tax (WET)
  • Fuel tax

Additionally, they may:

  • Design and implement compliance systems that adhere to BAS and business requirements
  • Advise you on the legal implications of the BAS provisions and laws
  • Review your company operations and reports to ensure they adhere to the BAS provisions
  • Offer you the certainty that you’re on the right path 

Conclusion

A bookkeeper can offer some good fundamental tax guidance if you run a business that doesn’t require more complex tax preparation and strategies. They’re also not as costly as accountants. 

If your business is registered as a company, have an accountant work on your annual accounts and corporation tax returns. 

We hope each professional’s role is now clear, and you now know who to call for your specific needs. For professional bookkeeping services, consider Visory.

No single bookkeeper fits every company. So once you partner with Visory, we will assign you an expert bookkeeping team that understands your industry inside-out. Our team will dedicate their efforts to ensuring your books are up-to-date. 

Want more information about our services? Let our Success Manager analyse your specific business needs. Get a Callback!

10 Tips on Bookkeeping for Tradies

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Big corporations, may have in-house accountants to help them do their financial calculations. As a tradie, you might not have one. 

Being a tradie does not excuse you from having crisp financial records and a clear financial understanding. Instead of investing hours upon hours learning small business accounting, which probably drives you crazy, you can easily outsource your bookkeeping, accounting, and payroll. But that does not excuse you from being on top of your business’s financials.

10 Bookkeeping Tips for Tradies

Here are ten bookkeeping tips for tradies that can help you set the right system, outsource to the right person and assess whether it is being done correctly or not.

1. Use Job Numbers

Job numbers are a way to identify individual tasks or jobs in an organization or business where you handle multiple projects, jobs, or tasks of the same nature. These numbers help distinguish one job from another to avoid miscommunication and confusion. These numbers become even more necessary as the business keeps growing and increasing its clientele base.

Using job numbers improves your bookkeeping by keeping clean records. These records help you track the progress of projects but, most importantly, track which projects are paid and which are yet to be paid. Furthermore, with such trackable projects, it is easier to optimize your execution process.

2. Create a Positive Bookkeeping Process

Most tradies do not enjoy paperwork, hence the career choice away from a desk. Bookkeeping for tradies, therefore, can be a cumbersome task.

To ensure you get it right, create an easy-flowing bookkeeping system. You can easily automate the flow from the job acquisition, execution, submission, invoicing, and payment if you use job numbers. You can also streamline and automate much of your payroll and accounts payable.

You can also outsource your bookkeeping, to receive assistance from a professional and set up everything as it should be.

3. Outsource Your Invoicing and Accounts Payable & Receivable

Managing all accounts can take a lot of time if done manually. Investing in an outsourced solution not only ensures you follow best practices but guarantees you stop sinking hours of your time into a standardised process. Instead, you could be off finding new clients to grow your business.

4. Stay on Top of Your Tax Obligations

Every business has to pay taxes. Filling in tax forms requires you to go back to your business finances to make the correct reporting. Failing to report correctly when filling in tax forms can be a crime. Therefore you should stay on top of your tax obligations. 

Nevertheless, you can work with a tax accountant who can help you get your records in check when reporting. In addition, a tax accountant will help you claim tax deductions that your business can be eligible for.

5. Don’t Mix Personal and Business Expenses

One of the critical character traits that successful tradies have to have is discipline. Not only discipline at work but also financial discipline. To avoid the temptation of using business finances to offset personal expenditure, it is a best practice to keep the two separate. Have a different bank account for your business and a different account for your personal expenses. The demarcation helps uphold the financial discipline required.

6. Monitor Your Bank Account

Making money is difficult. Spending it, on the other hand, is intuitive. You might think you have money in the bank and set off on a spending spree. That will harm or even kill your business. Instead, you need to be at the top of every dollar that enters and leaves your bank account. 

7. Keep In Contact With Your Customers

When you serve a customer, that should not be the end of your interaction. It is cheaper to service a previously acquired customer than to go out and acquire a new one. Therefore, it is crucial that you have your customers’ contact details so that you can keep nurturing that relationship to generate repeat business.

You might also need their contact details to reach out for feedback and recommendations. Also, if you will be rolling out new products or services, it is easier to get your customers to try, vet, and even become some of the earlier customers.

8. Maintain Detailed Financial Reports and Statements

The lifeline of your business depends on these reports and statements. Different financial reports and statements tell you different things. Having the details will ensure that the insight you derive from either of them is reliable.

The four financial reports and statements you need to keep accurate to the decimal – literally – are a balance sheet, an income statement, a cash flow statement, and an annual report. 

9. Keep Detailed Receipts

Receipts are proof of purchase or transaction. Keeping your receipts updated and detailed is vital for a business to track expenditure and earnings and as proof documents when tax season comes. Detailed receipts make for accurate reporting.

When you have an automated system, keeping the receipts is easier. But it is also advisable to keep physical copies in case of technological mishaps or corruption.

10. Outsource Your Bookkeeping and Accounts

There are experts that are more than capable of taking your bookkeeping and accounts workload off your plate and helping you manage them remotely. It is a good idea to outsource your bookkeeping if you intend to grow your business and focus on your clients and work. If you are stuck doing administrative work, then your business stalls. Let the professionals handle that and get back to developing your craft.

Bookkeeping for tradies is a crucial part of the business that cannot be ignored or done shabbily. It requires top-notch attention. With the tips provided, you can pay attention to the bookkeeping areas that matter.

But what would give your business more value would be to outsource your bookkeeping tasks. When looking for dependable bookkeeping experts, look no further than Visory. We have an expert team that will work with you to streamline your bookkeeping, accounts payable & receivable, and payroll services. Get started with Visory today.

How Do Bookkeeping Services Help Small Businesses?

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Bookkeeping is a vital process that helps business owners track financial records accurately. You shouldn’t avoid it if you want to keep your business organised, prepared for tax, and budget appropriately. Many small business owners are multi-tasking masters who opt to do their own bookkeeping instead of outsourcing the services from professionals.

But think of a day when you don’t have to attend to any back-office work. You could focus more on running and growing your business. By depending on professionals with greater bookkeeping and accounting knowledge, you reap the benefits of their expertise. This post will reveal the key benefits of bookkeeping services for small businesses. But before then, let us look at what bookkeeping entails.

What is Bookkeeping?

In the business world, bookkeeping is the process of recording and organising financial transactions. It is an integral part of accounting, focusing on recording daily business transactions in the books of accounts. These include sales, purchases, taxes, loans, investments, payroll, operational expenses, etc.

Bookkeeping establishes the accounting groundwork. In other words, accounting focuses on analysing the data collected from bookkeeping. This process allows business owners to know their financial position, detect financial problems early and fix them before they grow into full-fledged disasters. How you do your bookmaking determines the accuracy of the overall accounting process. Thus, it is vital to hire a qualified bookmaker to do the job.

The Benefits of Bookkeeping Services for Small Business

The benefits of outsourcing bookkeeping services for your small business are unmatched. Besides helping you organise and analyse financial information, you can accurately conclude the financial health of your business. These are not the only reasons bookkeeping is essential for a small business. 

The Australian Taxation Office (ATO) expects all businesses to maintain specific records and utilise accounting practices to track income and expenditure. Without accurate bookkeeping, tracking and reporting appropriate information to the ATO can be difficult. Here is a detailed overview of how bookkeeping services help small businesses. 

Makes You Prepared for Tax Time

Every business has to lodge a tax return at the end of the tax year. Tax deadlines are very strict, and lodging can be time-consuming. With a bookkeeping process in place, your financial information will be ready on time. That way, you won’t need to scramble for receipts and invoices with the taxman breathing down your neck. 

Enhances Accurate Budgeting

Outsourcing a bookkeeping service makes it easier to budget for the business accurately. With proper organisation of your income and expenses, it’s straightforward to review your costs and financial resources. A budget defines the financial roadmap for your business, helping you plan for the future by creating a manageable budget. 

Comparing your budget and the actual financial data is a perfect way to detect cost reduction opportunities or potential cash flow issues. If your financial books are inaccurate, it’s hard to make accurate budgeting since it will all be guesswork. 

Promotes Better Decision Making

As a business person, you need to clearly understand your finances to plan your company’s future effectively. You may have to make significant decisions like opening a new location or hiring a new employee. To make such decisions with confidence, it’s critical to understand your company’s financial performance. 

Accurate bookkeeping with the help of a professional offers up-to-date information, helping you make informed decisions. If the reports say that your business is running out of capital, you can opt to take a loan to boost development. 

Maintains Organised Records

The stress of trying to find a crucial document at the last minute can lead to missed deadlines and possibly a few errors. One thing a business can’t afford to do is make mistakes, as it could lead to costly consequences. A bookkeeping service can help with that! It will keep your books updated throughout, and help you maintain organised records. That way, it will be easier to find any information you need in no time.

It helps you Focus on Other Business Operations

If you decide to do bookkeeping on your own, you will spend much of your time paying invoices, processing payroll, and tracking expenses. As a result, you will have insufficient time to attend to other operations. A bookkeeping service allows you to focus on what you do best. Having enough time to focus on operations enables you to grow your business effectively and give you ample time for research and development plans.

Lower Costs

Every business owner aims to reduce their overall costs of operations. One way of achieving this is minimising the salaries and wages of workers by employing only a few. An in-house bookkeeper requires a significant salary and benefits, but it’s possible to do without them. The cost of hiring a third-party bookkeeping service can be relatively lower, and you will have an assurance of excellent services. 

Helps to Avoid Conflict of Interest

It can be risky to entrust bookkeeping and accounting to one of the owners in partnership businesses. Misconduct accusations can potentially ruin the relationship even when a record-keeping error is unintentional. If something goes wrong, the other members might question the intentions of the person responsible. 

Hiring an independent bookkeeping service helps avoid these inconveniences while boosting confidence among the owners. They can have faith that every financial statement is true, accurate, and unbiased.

What to Look For in a Bookkeeping Service

A third-party bookkeeper is typically an individual with relevant experience in accounting services offered to a diverse range of businesses. When looking for a bookkeeper, choose one that is well-acquainted with your business type and preferably industry. Look for those that specialise in helping small businesses like yours. 

Their service should portray excellent skills and experience to determine profits, losses, turnover, and other financial factors. This will help you determine the financial health of your business with ease. 

Get the Best Bookkeeping Service for your Small Business with Visory

Visory is a reputable bookkeeping company that gives you access to accounting and finance services that scale with your business. Our team of experts has experience in different industries and is ready to hit the ground running anytime. You will receive strategic reporting and insight to drive growth. Our monthly subscription fee is affordable and worth the investment. Contact us now to book a meeting.