What is Bookkeeping

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What is Bookkeeping?

Bookkeeping services are as vital and essential for the business as the day to day business operations. from small independent businesses to large and complex organisations, Bookkeeping services include a wealth of components. it is about so much more than managing the books and records of receipts / payments of the organisation.

Bookkeeping is also relevant to business management. By creating and managing various reports for state tax authorities. but also very important for financial business data like salaries, taxation, and effective management as part of the examples.

Today regulatory requirements are mounting and become more complex. as well as the introduction of the difficult business situation make Bookkeeping services, even more, vital to the success of a business.

What’s included in the bookkeeping Services:

Any company or sole trader that have a business operation in Australia must manage his books and keep records for 5 years, and if annual revenue is higher than $75,000 (will change from time to time) must report and collect GST and account for it in his books.

Besides that, all the accounting practice is relying on a good management of the books to conduct a year-end Audit. and make sure all the business operation is translated into the accounting language.    

Bookkeeping service includes (but not limit to):

  • Account for all the payment the business carry in the financial year. this recording will be done accurately, in the right account and on time. in order to record a payment made by the company/sole trader you must have an invoice to authenticate the expense;
  •  Account for all the money coming in the business in full. that should be accompanied by an appropriate tax invoice;
  • accounting for all the GST in the business. The GST collected & the GST paid, and submitting the BAS/IAS reports on time and accurately. and payment on time of the statutory obligation that arises from these reports;
  • The complete management of the books with accordance to the accounting principals;
  • The right way of recording transactions. that will reflect the business meaning of the operations;
  • Keeping the record for the stated time by the ATO. in a manner that will enable you to extract the data when you need it the most;
  • A good bookkeeper will be able to tell you, by using the records if you are overpaying vendors, overspend on your expenses. and tell you if you are maximising your personal efforts;
  • Producing the right reports for the management. that action will enable them to make business decisions on time. only a very good bookkeeper will be able to explain these reports and how to use them;
  • management of payroll and all the relevant statutory requirements. and explain the cash flow implication to the business.

The different types of Bookkeeping:

There is two record creating methods, where the tax law will define which one we use. There is cash basis bookkeeping and accruals basis bookkeeping. 

  1. The cash basis – relevant for small business that pays in cash and receives payment in cash – account for all the transaction based on cash movement.
  2. The accruals basis – relevant for everyone else – account for all the transaction based on invoices, rather than cash movement.

Most businesses in Australia operates using an external bookkeeping service. The transfer of all the relevant data to a qualified BAS Agent that will take care of the bookkeeping in a professional and timely matter. This is by far the right way to go. The business owner focuses on what he does best – his own business endeavour. While the BAS Agent focuses on what he does best – keeping the books and helping the business owner use the financial data to achieve outstanding results. 

Bookkeeping Software:

In recent years, there has been a rash, both technologically and in terms of usage, of accounting software for businesses of various types and sizes.

These programs offer a variety of professional and advanced tools for managing accounts. including, for example, invoicing and documents, managing income and expenses, registration, production of reports to the ATO, data on payments to the authorities, business and producing financial reports and more.

Accounting software makes it possible to reduce costs, obtain the relevant data and abide by the law in terms of bookkeeping – it is important to check that the program is approved and include all relevant characteristics of a business.