Coronavirus Support Measures

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As we are all now no doubt aware we are currently living in unprecedented times, as a result of the Coronavirus Global Pandemic. Whilst this is first and foremost a health crisis, the economic ramifications and impact upon small businesses in particular is expected to be severe.

We, at Progressive Accounting Solutions, are here to support our clients through these uncertain times. Below, you will find details regarding the Economic Stimulus Measures announced by the government to support small businesses. Note, as more stimulus measures are announced we will continue to update this page so that you may have access to all the relevant information.

JobKeeper Wage Subsidy Payments

This measure will provide businesses severely affected by the Coronavirus with a wage subsidy for each eligible employee. Eligible businesses will be entitled to $1,500 per fortnight per employee for up to 6 months. In order to be eligible employers must have a turnover of less than $1 billion and have had their turnover reduced by at least 30% when compared to a comparable period (of at least a month) a year ago.

Eligible employers will receive a payment for each eligible employee that was on their books as of 1 March 2020 – including fulltime, part time, long term casuals and stood down employees. Eligible employers who have stood down employees prior to the commencement of this scheme will be able to participate.

Self-employed individuals will be eligible to receive the JobKeeper payment where they suffered or expect to suffer a 30% decline in turnover.

The scheme will begin 30 March with the first payments expected to be received by employers in the first week of May.

Employers must select to participate in the scheme and will need to make an application with the ATO where they will be required to provide supporting information. You can register your interest at the link below.

https://www.ato.gov.au/general/gen/JobKeeper-payment/

Boosting Cash Flow for Employers

This measure will provide from $20,000 to $100,000 of tax-free payments to eligible businesses (increased from $2,000 to $25,000). In order to be eligible a business must have an aggregated turnover of less than $50 million and have been a registered employer with the ATO prior to 12 March 2020. Businesses that withhold tax from their employees will receive payments equal to 100% of the amount withheld up to the maximum payment of $50,000. Businesses that pay salary and wages will receive a minimum payment of $10,000 regardless of how much PAYG is remitted to the ATO.

Payments will be delivered by the ATO as a credit to Integrated Client Account. Should this payment result in a credit balance on your account you may request a cash refund. These payments will be automatic and will begin from the 28th of April. 

An additional payment is also being introduced in the July-October 2020 period. Eligible entities will receive additional payments equal to their initial payments. (i.e. if you received $40,000 in the initial payment, you would receive $40,000 in the second payment).

Example

Sally owns a hairdresser’s salon on the Bellarine Peninsula. She employs 12 hairdressers, with average salary of $50,000 per year. Sally reports PAYG withholding of $8,788 for her employees in each of her monthly BAS. Under the Government’s changes, Sally will be eligible to receive the payments on lodgement of her relevant BAS. Sally’s business will receive:

  • A credit of $26,364 for the March period, equal to 300 per cent of her total withholding.
  • A credit of $8,788 for the April period.
  • A credit of $8,788 for the May period.
  • A credit of $6,060 for the June period, before he reaches the $50,000 cap. Sally will also receive an additional payment of $12,500 for the June period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
  • An additional payment of $12,500 for the July period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
  • An additional payment of $12,500 for the August period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
  • An additional payment of $12,500 for the September period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.

Under the previously announced Boosting Cash Flow for Employers measure, Sally’s business would have received a total payment of $25,000. Under the Government’s enhanced Boosting Cash Flow for Employers measure, Sally’s business will receive $100,000. This is an additional $75,000 to support her business.

Supporting Apprentices and Trainees

Those businesses that employee apprentices and trainees will be eligible to apply for a wage subsidy equal to 50% of the apprentice/trainees wage for the nine months ended 30 September 2020. Where a small business is not able to retain an apprentice/trainee the subsidy will be available to a new employer. Employers will be reimbursed a maximum of $21,000 per apprentice/trainee ($7,000 per quarter). Employers can register for the subsidy from early April. Final claims for payment must be lodged by 31 December 2020.

Increasing the Instant Asset Write-Off

The threshold for the Instant Asset Write-Off will increase from $30,000 to $150,000 for assets purchased between 12 March and 3 June 2020. Businesses with a turnover of less than $500 million will be eligible for this measure.

Accelerated Depreciation Rules

From 12 March 2020 until 30 June 2021 eligible businesses will be allowed to claim a 50% depreciation deduction for assets that are first used or installed ready for use in the year that they are purchased. Existing depreciation rules will apply for the balance of the asset cost. Businesses with a turnover of less than $500 million will be eligible for this measure. Assets that can be depreciated under Division 40 of ITAA 1997 will be eligible for this measure.

ATO Administrative Relief

To assist businesses experiencing financial difficulty as a result of this pandemic to ATO have announced a series of relief options. Please note these relief measures and not automatic and if you wish to take advantage of them you or your tax agent will need to contact the ATO. The options include:

  • Payment Deferral’s – The ATO will allow you to defer any tax payments for up to four months if you or your business has been affected;
  • GST Credits – businesses on a quarterly reporting cycle may elect to change their GST reporting to monthly in order to get quicker access to the refunds that you or your business is entitled to. Changes can only be made at the start of each quarter;
  • PAYG Instalments – If you are a quarterly PAYG instalment payer your can vary the instalment on your March statement. You may also apply for refunds for any instalments paid in the September & December 2019 quarters.
  • General Interest Charge and Penalties – The ATO will consider remitting any penalties and/or interest applied to your account if you or your business has been affected by the pandemic
  • Low Interest Payment Plans – the ATO will offer low interest payment plans to those businesses with tax liabilities who would like to enter an arrangement.

The ATO have stressed that employers still need to meet Superannuation Guarantee Obligations.

Victorian Payroll Tax Refunds

The Victorian Government has also announced its own business support package. This includes the refund of Payroll Tax Liabilities for eligible businesses. Businesses with a payroll of less than $3 million will be able to access refunds for all the payroll tax remitted for the 2020 financial year from Friday the 17th of March. Additionally, no further payroll tax will be required to be remitted for the remainder of the 2020 financial year.

Victorian Business Support Fund

Under this scheme businesses adversely affected by the Corona virus may be eligible for a one off $10,000 grant.

In order to be eligible for this grant businesses must:

  • Have been subject to closure of been severely impacted by government social distancing directives;
  • Employ staff;
  • Have a turnover of more the $75,000;
  • Have a payroll of less than $650,000;
  • Hold an ABN;
  • Have been operating a business in the state of Victoria on or before 16 March 2020

Applicants must certify that they meet the above eligibility criteria and may be subject to an audit and required to produce supporting evidence. Applications can be made online at the following link:

https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund

We remain committed to servicing our client’s though-out the pandemic and will contactable as per usual. Should you have any questions with regard to the above or anything else, please don’t hesitate to contact us on 0438 329 958 or via info@progressiveaccounting.com.au.

Five Tips for Small Business Finances

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Running your own business can be quiet stressful without the added pressure of having to worry about the finances of the business. Data entry, reporting, tax obligations and debtor issues can cause major headaches for small business owners and can have dire consequences if not given the proper amount of attention. At Progressive Accounting Solutions we understand how difficult it can be running your own business and have compiled this blog to help assist small business owners in better managing there accounts.

 

Make time to work on your accounts

It is not uncommon for the finance function of small businesses to be forgotten about during day-to-day operations. Owners are often more concerned with running the business, generating leads and building a brand. However by dedicating an allotted amount of time each week (say half an hour) solely to the finances of the business, owners can gain an insight into how the business is tracking, allowing them to make more informed decisions going forward. In addition regular work on the finances of the business can help in identifying damaging trends within the business (i.e. underperforming areas, unpaid debts etc.) immediately rather than waiting until months down the track. It is also easier to remember transactions when you are entering them at regular intervals as opposed to truing to complete data entry at the end of the month/quarter.

 

Budget

Budgeting is one of the most underestimated and underused finances tools when it comes to small businesses. When properly constructed budgets allow owners and stakeholders to identify the areas of the business that are exceeding what was initially planned for as well as areas of the business that need improvement. By regularly comparing actual results to the budget (as well as what has occurred in prior reporting periods) owners can gain important insight into how there business is performing. It is important to note that budgets will not always be perfect especially when the business is in its infancy. However by carefully adjusting the budget as the business progresses and comparing results with previous periods it provides unrivalled understanding of the business.

 

Control your Debtors

Getting payments form customers can be a major problem for small business owners. Whether this is caused by poor recording and tracking of outstanding invoices or customers taking too long to pay, the results can be disastrous. The flow on affects include: late payments to your suppliers and or employees, late payments to the ATO, late payments of debt and other obligations and the various penalties and consequences associated with missing these payments. In order to avoid these situations small business owners need to ensure that they are tracking invoices accurately and minimizing the amount of time between invoicing and payment. Some common strategies that small businesses employ to ensure payment on time include: upfront invoicing for poor payers and not taking on any extra work from customers who have an outstanding debt with the business.

 

Engage Outsiders

It is always good to get the input of professionals and people outside of the business. This does not necessarily mean engaging an accountant or bookkeeper, it simply means getting the input of some one outside the organisation. This could come in the form of a friend, a colleague or someone else with experience with finance and/or small businesses. The reason for this is that often these people will be able to provide you an alternative viewpoint to your own. This often results in ideas and/or strategies that you wouldn’t consider yourself. Although it is recommended to get a professional’s input for specific issues (such as tax and/or accounting software issues) other can often provide advice and insight for other business issues that may not be considered by a professional (i.e. industry specific issues).

 

Best Suited Software

Finally employing the use of the best suited accounting software for your business will save owners a lot of time. These days’ small business owners have a lot of choices when it comes to accounting software, however it is important to be aware that different programs will suit different businesses better. For example there are programs available that produce hundreds of reports, allow for employee and payroll functions, calculate GST and produce ATO statements and much more. These programs are suitable for businesses that require all this functionality. However if a small business only requires basic data entry and reporting and does not need to worry about employees and/or GST this may not be the best-suited program for them. There are also programs now that link with your internet banking and have the capability of automatically allocating transactions that occur on a regular basis. Again this may suit some businesses however if you business does not have many regular transactions then it may not be the best program for your business. Therefore it is important to consider your business and your requirements before choosing which accounting program you will go with.

 

Note this is not an exhaustive list of everything small business owners can be doing; but some of the more common areas where small business owners fall down. The team at Progressive Accounting Solutions are dedicated to assisting the small businesses of Geelong, the Surfcoast and the Bellarine with efficient and reliable accounting and bookkeeping services. Should you require any assistance with your small business or have any questions please don’t hesitate to contact us at info@progressiveaccounting.com.au or on 0438 329 958.

Public Practice Accounting – Geelong V London

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Recently I spent two years working within industry and Public Practice accounting firms in London.

Upon returning to my home town of Geelong I have made note of some of the similarities and differences arising between big city and regional city accounting. Although there a large number of firms providing similar products and services in both cities there was significant differences arising when it came to local knowledge, the approach to providing services to clients as well as the length of time clients have to wait for jobs to be completed.

The main similarity between accounting in London & Geelong is that there is a large number firms providing very similar products and services.  This market saturation can prove to be both a blessing and a curse for small to medium businesses. Although market saturation often leads to better prices for consumers (i.e. small businesses) it can also result in firms that specialise in one area and/or industry which means that there are some things that they are unable to help there customers with.

One of the main differences I have noticed between public practice accounting in London and Geelong is local knowledge. As London is a financial hub a lot of people from around the world are attracted to work there. This results in these people (myself included) not having a great knowledge of the city in which the majority of the clients are either based or operate. Regional city accountants (such as Geelong) on the other hand are often born and bred in the area resulting a in a great local knowledge as well as a large network and friends, colleagues and associates which can prove to be very beneficial to there small business clients.

Regional accountants also tend to tailor their services a lot more compared to the majority of bigger city firms. The accounting/bookkeeping needs of a small businesses are unique and vary from business to business. In my experience I have found regional city accountants to be a lot more flexible in the service offerings they provide to clients whereas bigger accounting firms have a set service offering and packages. This can be of great benefit to businesses as it allows them to focus only on the services that they feel they require and not waste time on money and products that they do not need.

Finally, bigger city accounting firms tend to be slower to act when it comes to clients needs. Due to the large volume clients, bigger city firms may be unable to provide products or services to their clients as quickly as they would like.

Regional city accounting firms, on the other hand, tend to be a lot more flexible when it comes to completing urgent work for clients. Although some of these firms do have large client bases and workloads they can be more adept at managing the workflow to meet important deadlines and keep their clients happy.

At Progressive Accounting Solutions we pride ourselves on being Geelong locals.

We are across all news within the region that may affect our clients and have a wide network of professional associates that assist us in achieving the best possible outcome for all the businesses we deal with. In addition to providing reliable and affordable accounting and bookkeeping services ourselves we also like to promote networking within our client base and our associates for the benefit of all businesses within the region.

Should you have any accounting or book keeping queries please feel free to set up a free, no obligation consultation by contacting us at: info@progressiveaccounting.com.au or 0438 329 958.

Business Activity Statements – Frequently Asked Questions

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Whether you have been running your business for a long period of time or a new to the business world, Business Activity Statements can cause many headaches for small business owners. Laws and regulations that are constantly changing and being updated by the Australian Taxation Office (ATO), in addition to the already complex nature of GST can result in small business wasting a lot time trying to produce and lodge these reports.

In order to assist the small businesses of Geelong, the Bellarine & The Surfcoast the team at Progressive Accounting Solutions have provided the answers to some frequently asked questions small businesses may have when it comes to producing BAS reports:

Q: How often are Business Activity Statements (BAS’s) required to be lodged?

A: This depends on the business. Typically small to medium business are only required to lodge BAS’s once every quarter (4 times a year). However businesses may elect to lodge monthly should they wish (i.e. to keep on top of cash-flow). It should be noted that if you business turns over more than $20m or you have a large number of employees the ATO may require you to lodge on a monthly Basis.

Q: When are BAS’s due for lodgement?

A: If you lodge your own BAS’s they are due with the ATO on the 28th of the month following the end of the accounting period. For example the December 2015 Business Activity Statement would be due on the 28th of January 2016 if you lodged it yourself. However if you use a tax agent the lodgement date is two months after the end of the accounting period (i.e. following on from the above example, if you lodged through a Tax Agent your due date would be the 25th of February 2016).

Q: Do I need to have a copy of an invoice/receipt to claim GST credits on a Business Activity Statements?

A: Yes in order to claim GST credits on an expense you are required to have in your possession the relevant invoice showing the GST portion of the expense. These records are required to be kept for seven years. Rather than keep these pieces of paper around the office we at PAS suggest that you save them onto your computer where they will take up minimum space and be much easier to find should you ever need to locate them.

Q: What is the difference between Cash & Non-Cash reporting options?

A: Cash reporting essentially allows you report only on the amounts you have actually received excluding those amounts that you owe and/or are owed. For example a business that elects cash reporting will not have to include GST collected on invoices raised but not yet paid as of the end of the accounting period. This can be a useful option for small businesses who often have debtors who do not pay for extended periods of times. However it should be noted that should you select this option you will only be able to claim GST credits on expenses when you have actually paid for them (i.e. if you have large bills unpaid in Creditors at the end of the accounting period you will not be able to claim the GST credits on these expenses for that accounting period).

Q: Can I change my PAYG Tax Instalment?

A: Your PAYG tax instalment is your regular contribution towards your year end income tax liability as is included on the Business Activity Statement. You do have the option to vary this amount however PAS recommends that this is only done if you are sure that amount charged is too much. If you reduce you PAYG instalments at any point through-out the year and you end up having not accrued enough at the end of the year the ATO will not only charge you the shortfall but will also apply interest to the reduced amount(s). That being the case we recommend conducting with your accountant and/or tax agent before varying any PAYG instalments.

Q: What happens if I make a mistake?

A: If you do make a mistake that you become aware after lodging your Business Activity Statement do not panic. The ATO allows you to go back and adjust your previously lodged statements and make adjustments. You will also find that most GST adjustments can be adjusted for on your next BAS. This makes the whole process a lot easier.

At Progressive Accounting Solutions we have many years experience in helping the businesses of Geelong and the surrounding suburbs in completing their Business Activity Statements. Our affordable, reliable and efficient service options include: training, completion and lodgement and even ATO liaison services. Should you have any questions with regard to your BAS or any other accounting and tax related issues please don’t hesitate to contact us at 0438329958 or info@progressiveas.com.au.

Small Business Tax Concessions

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Small Businesses are entitled to certain exemptions that larger businesses are not entitled to, however many small business owners are completely unaware of the benefits they are entitled to. These exemptions relate to Income Tax, Goods & Services Tax (GST) and Capital Gains Tax (CGT) and can save businesses a lot of money that would otherwise be paid to the ATO. In order to qualify as a Small Business your Gross Turnover (i.e. your income included GST) needs to be below $2m. If your business fits this requirement then you are eligible to apply any of the concessions listed below, however you do not have to.

With regard to Income Tax Concessions small business are eligible to apply simplified Depreciation and Stock rules and can access a reduce Tax Rate. Under the simplified deprecation rules small business can immediately write off all assets costing less than $20,000 (acquired after the 12th of May 2015). This is of great benefit to small businesses as it significantly reduces the net profit and therefore tax payable. However businesses should exercise caution and not simply purchase a large asset just because they are eligible for a deduction (i.e. the asset should be required by the business). These businesses are also eligible to pool most other depreciating assets (in a small business pool) and depreciate at a rate of 30%. The simplified Stock rules allows businesses to estimate the value of Stock on Hand at year end provided the difference between the opening balance and closing balance is no more than $5,000. Thus saving the time of completing a stocktake. Finally small businesses are entitled to a company tax rate of 28.5% as opposed to the standard 30%.

Small businesses are also entitlement to specific entitlements with regard to their Goods & Services Tax (GST) namely the ability to report on a cash basis as well as the ability to pay in instalments. Reporting on a cash basis allows small business to only remit GST on monies they have received. For example if at the end of an accounting period you have raised a large invoice to a customer but have not received payment you do not need to include that invoice on your Business Activity Statement (BAS). However it is important to note that if you do elect to report your BAS’s on a Cash Basis you will not be able to claim GST credits on expenses that you are yet to pay. Small Businesses are also entitled to pay GST in instalments. Essentially the ATO will provide you with instalments each quarter that you are required to pay. The at the end of the year you will be required to provide a GST report for the year and pay any shortfall that has arisen (or be entitled to a refund should your instalments exceed the amount of GST owed).

Capital Gains Tax (CGT)is a yet another area of the Tax system where small businesses are entitled to tax exemptions being: active asset exemptions and reductions as well as rollover exemptions. If you have owned a business for over 15 years and are over the age of 55 then you may be entitled to the active asset exemption, which means will you will not pay CGT when you dispose of the business. Alternatively is you are under the age of 55 you may still be entitled to a 50% discount in CGT upon the sale of your business.  Finally is you dispose of your business and purchase another one you may be entitled to rollover relief which entitles you, as a small business owner, to rollover any Capital Gains made to a later income year (i.e. upon the disposal of the new business).

These Small Business concessions can prove to be complex and time consuming however they may provide small businesses with significant reductions in the amount of Tax they have to pay. At Progressive Accounting Solutions we have years of experience in providing the businesses of Geelong, the Bellarine and the Surfcoast with advise on whether or not they are eligible for these concessions. Therefore should you have any queries with relation to the above or any other accounting and/or bookkeeping issues please feel free to contact us and set up a free, no obligations consultation. info@progressiveas.com.au or 0438329958.

Cloud Accounting Software

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Choosing accounting software is one of the most important decisions owners have to make when establishing a business. The right accounting software will ensure that the finance function of the business runs as smoothly as possible where as the wrong software can waste time and money and cause owners a lot of unnecessary stress. With the advent of cloud accounting in the past couple of years the choices of software provider are more numerous than ever, so which one is right for your business?

Firstly let’s distinguish between “Cloud Accounting” programs and “Other” programs. Cloud Accounting programs are stored remotely via the internet. Like your iCloud, your G-mail account and your internet banking this information is not stored on your computer but rather “in the cloud” for you to access anywhere, anytime. “Other” programs, on the other hand, are the exact opposite in that they are required to be installed on your computer i.e. Microsoft word. So when we are talking about this with regard to accounting programs we are comparing software that you have to install on your computer versus those programs that are accessed via the internet.

These cloud accounting programs can save a business time & money, allow access to real time financial data, are not required to be backed up or saved and provide sleek dashboard reports that give a simple snapshot of how the business is tracking. However other accounting programs can prove cheaper in the long run, do not require internet access and can provide a lot more reporting functionality.

Because cloud accounting programs are based on the internet they are able to sync and source data from other areas of the internet. The most notable example of this is with business bank statements. These programs can not only import data from your online banking service, but with today’s technology, can identify what most of these transactions relate to and allocate them to the appropriate nominal ledger account. This results in a lot more efficient data entry and can half the bookkeeping time when compared to other accounting programs. However unlike hard-drive programs often cloud-based programs require commitment to a contract of service over a period of time (i.e. 12 months). Although hard-drive programs offer similar contracts that allow access to constant upgrades many businesses do not require this service and choose to only pay a one off upfront fee, which can prove more cost effective in the long run.

Another advantage of cloud accounting programs is the fact that they allow access to real time data anywhere that you have access to the internet. As these programs are continually syncing with sources of external data (i.e. internet banking) the information contained in the reports you are accessing is constantly up to date. That is the reports are inclusive of all transactions up to that point in time and do not exclude transactions from the past few days/weeks, as can be the case when you are relying on reports from a hard drive program. This provides a huge benefit to owners and stakeholders of the business who require this information when making important decisions about the operations of the business. It’s important to be aware that some transactions, such as manual accounting adjustments (i.e. depreciation, accruals, prepayments etc.), are still required to be entered manually and therefore some of the reports provided may not be 100% complete. Also should, for some reason, you lose access to the internet, or the quality of your connection be poor you will not have access to your system and the reports contained within, which is a non-issue for other accounting programs.

Cloud accounting programs provide sleek, simplistic, easy to use reporting systems that allow businesses to produce the reports they require with minimal effort. The majority of these programs also provide a set of dashboard reports that give users a general overview of the how the business is tracking. These reports include real time information such as: bank account balances, debtor balances, upcoming bills and other liabilities, sales trends etc. This has proven to be a very useful tool for business owners and other decision makers as it provides a snapshot of the business every single time you log in. However it should be noted that the reporting functionality of these cloud based programs is still lacking when compared to those reports that can be produced by other programs. Cloud based programs provide very basic reports (i.e. Profit & Loss, Balance Sheet, Cash-flows etc.) that serve the needs of most small to medium businesses, however for those businesses that require a little more advanced reporting functionality (i.e. product classing, in-depth analysis etc.) other accounting programs may prove to be a better suit.

All businesses are unique and therefore all businesses will have different requirements of there accounting software. For small to medium businesses cloud accounting can prove to be a very useful tool assisting in reducing bookkeeping time, producing accurate and reliable reports and be provide access anywhere that you have access to the internet. However there are certain drawbacks that all business should analyse before making a decision about which program is right for them. At Progressive Accounting Solutions Geelong we have years of knowledge and experience in dealing with various accounting softwares whether they be based on the cloud or not. If you require some advice or have any questions with regard to your businesses accounting software and any other accounting and/or bookkeeping issues please feel free to contact us to set up your free consultation. info@progressiveas.com.au or 0438329958.

 

Bookkeeping Hints & Tips

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Bookkeeping is a very important part of the accounting process for all businesses. Accurate bookkeeping allows for measurement & management of aspects businesses finances (i.e. costs control, analysis of income sources, cash-flow analysis, budgeting etc.) as well as providing a way to track how the business is performing as a whole. However for those new to business bookkeeping can prove to be complex, stressful and a waste time that could be spent elsewhere (i.e. chasing new customers, improving the business etc.). Below are some useful hints and tips that the team at Progressive Accounting Solutions have compiled in order to assist in making the bookkeeping process easier for all small business.

Firstly choosing the right accounting software is one of the most important decisions business owners need to make with regard to the accounting and finance function of there business. The accounting software you choose for business should be: easy to use and interact with, provide efficient data entry solutions (i.e. data streaming), produce accurate, reliable and relevant reports & fit the businesses budget. There is no point purchasing software that provides thousands of reports when you will only use a handful of them in the operation of your business or software that requires manual data entry when there are programs out there that can automatically enter transactions for you. Cloud accounting programs are proving to be a very popular solution right now as they can be affordable, stream data from internet banking services (saving a lot of data entry time) and are accessible anywhere. However before you make a commitment to one of these programs it is important to ensure that it will provide all the services that your business requires when compared with other programs.

Once an accounting program has been selected the next step is establishing a chart of accounts to suit your specific business. The Chart of Accounts is the list of accounts that your business will use for bookkeeping, reporting etc. Although all accounting software’s will include a generic chart of accounts (and sometimes even a chart of accounts specified to your industry) it is important to adjust this to suit your unique business. By eliminating the accounts that you won’t use, and adding new accounts that may not have been included otherwise, the data entry process is streamlined. There may still be instances through-out the businesses life where you are adding and deleting accounts, however if the initial chart accounts is accurate it will make the data entry process a lot more efficient.

Accurate, detailed and consistent data entry is vital for small business looking to produce accurate, detailed and consistent reports. This may seem pretty self-explanatory however many small businesses make errors when it comes to data entry, which can result in poor reporting & un-reconciled accounts not to mention the time wasted in searching for the errors. By ensuring the correct amounts are being entered against the accounts they have previously been entered against it will ensure that reports are consistent and therefore can be compared from period to period which helps business owners identified trends and/or areas of concern. Furthermore by ensuring detailed annotations are used in the data entry process it will make items a lot easier to identify when analysing reports (i.e. “Bill’s Mobile Phone Bill – July 15” is a lot easier to identify than “Telstra”).

Finally it is important to enter data and reconcile bank accounts on a regular basis. If you wait until such time as you need a report or you need to provide your books to your tax agent/accountant, the data entry process can be lengthy and stressful, as you may trying to reconcile transactions from months previous. However if you complete this process on a regular basis (i.e. weekly) it will be a lot easier as the transactions are fresh in your mind. This will also allow you to produce more regular reports and identify discrepancies and/or other issues immediately rather than waiting until months down the track.

Taking all of the above into account there will still be times when you, as a small business owner, experience difficulties when it comes to your bookkeeping. Therefore it is important to have third parties that you can call upon to guide you, whether they be bookkeepers or accountants. At Progressive Accounting solutions we have many years experience is assisting the small to medium businesses of Geelong, the Bellarine & the Surfcoast with their bookkeeping problems: from choosing the right accounting software right down to deciding which account certain transactions should be allocated to. Should you be experiencing any problems with your bookkeeping and/or any other accounting issues please feel free to contact us and set up a free, no-obligations, consultation. info@progressiveas.com.au or 0438329958.