Tips for Starting in Business – Bookkeeping Edition!
So you have started in business but not sure what to do with your accounts, never fear we are here to help.
Firstly, a huge congratulations for starting your own business or organisation we are proud of you, we hope that you have taken a moment to celebrate this achievement! Ok now to roll up our sleeves and talk about the nitty gritty behind the scenes stuff of starting a business.
Software requirements
Ask yourself what do you need from the software right now to make your life easier and what can you do without while you are starting up or adjusting to using Xero?
For example do you need to send invoices?
Are you drowning in paperwork or is it just you and you spend very little at this stage?
Do you have a separate bank account and credit card? If not we suggest you make the split immediately as it will change your life!
Based on the answers to these questions will depend on which Xero package you will need to sign up for. Did you know that as a Xero partner we also have access to partner editions of Xero – which may suit your needs so please feel free to chat to us to see if this is something that will suit your needs.
GST Registration
What does it mean to be GST registered and what does that mean I have to do?
Well being registered for GST means that you need to report to the Australian Taxation Office (ATO) the Goods and Services Tax (GST) that you make on your sales minus the GST you have paid on your purchases.
Most industries will have to include GST on sales if they are registered for GST. Some exceptions to these rules are medical and health industries.
There are three reporting periods that we will rank in terms of what we see as the most we see in our practice with our clients: quarterly, monthly and then annually. There are also two reporting methods. Cash or accrual. When you register for GST these will be made clear but often we find that in amidst everything else going on that this can be forgotten.
Cash means that the income or purchase is recorded when you receive or make payment whereas accrual is based on when the sales invoice is generated and when the bill is received and not when paid.
Xero can help with running the reports to lodge your business activity statements to the ATO, you just need to make sure that you are coding each transaction correctly with the correct GST code.
Systems
Ok, this one I promise I will be less nerdy!
So in order to ensure that I am doing things in my business and not just getting overwhelmed I find I have to have a system. When I go to officeworks to buy more pens and receive a receipt I then hoard this in my wallet.
I am not allowed to touch the scanner in our workplace so I keep them safe in my wallet until Monday morning when I tip the contents of my wallet (don’t worry I don’t carry cash!) and put in a folder for the wonderful Jenna to scan. Then on a Friday I reconcile my own accounts and review what is happening in my business. I have a system for this small process and I find that it then become second nature and not an overwhelming task.
We find that most things in business can have a system and that this streamlines things and ensures that they are done at the right time.
Breathe
Last but not least and I think this should be in every edition of starting a business but that is to breathe. Realise that there is some sort of steep learning curve in business, or is that just me? Realise that you don’t need to be an expert at everything nor is that even possible.
We actually offer a once off support, we can help you get set up and give you some training, we then offer quarterly checkins and can ensure that you are compliant and lodge your business activity statement or we can do everything for you.
It’s not an all or nothing sort of situation with us we understand everyone and every business is different so we are here to help no matter where you are on your business journey.
