One of the biggest, and perhaps the most annoying, tasks you'll have to tackle in your business is bookkeeping. Sure, you can hire an accountant to do all the job for you, but it is still crucial for you to know how it works, or at the very least, what you should be doing to manage the books. That way, you and the accountant can work together seamlessly, managing the books and understanding everything that's going on.
That said, if you're wondering how you should do bookkeeping, here's what you need to know:
1. Pay Attention to the Expenses
While you might not be dealing with a brand new expense every single day, it is still a great idea that you remember to look at expenses as often as you can.
In doing so, you can keep tabs on the expenses you're currently incurring, as well as ones you've already covered, allowing you to make better-informed decisions.
2. Look at Your Cash Flows
When you're looking at cash flows, you're looking for how much money is coming in and going out.
How much money do you have? Where does that money need to go? When you understand your cash flows, you'll be able to make better decisions on where to invest your money in or to save the money for emergencies as well. You don't want to end up investing everything and realising that there are still expenses to cover. You also don't want to end up keeping every dollar to yourself worrying that you'll lose the money when in fact, you have plenty to invest with to grow your business.
3. Analyse the Performance of Your Entire Business
At least once every month, you'll need to step back and look at your entire business. In other words, you want to get a big picture of what's going on.
When the final day of the month arrives, sit down with your bookkeeper and look at all the accounts. From expenses to sales, you'll need to go through them all. The point here is to help you understand the financial position of your business. Is it making a lot of money? Are there too many expenses to make a profit? Information like these can help you make the right decisions to capitalise on profitable investments or avoid making calls that will put your business in even more debt. In other words, you're preparing for the month ahead.
4. Track and Organise Everything
You must have an organised system that'll help you track the flow of money. For example, you would want to have your employees drop all their receipts into a box so that they wouldn't lose it, and the accountant can go through it, reimbursing as necessary. That way, no expenses go unaccounted for that would otherwise leave you and some employees unhappy.
While you don't necessarily need an accountant to do that, hiring a bookkeeper would make life easier.
Bookkeeping is a lot of work. You must put a lot of effort into finding out the financial status of your business, where the money is coming from, and where it is going. When you're able to keep your books appropriately, you'll be able to keep track of the performance of your business. Because of that, you can make informed decisions that'll steer your company towards success.
If you’re looking for professional bookkeeping services in Australia, get in touch with our accountants on the Gold Coast today! We’re happy to help.