Why Constructive Bookkeeping is Important for Your Business

Bookkeeping is the foundation of every business. Constructive bookkeeping is crucial in order to monitor your cash flow, taxes, finances, and the robustness of your business. It helps you keep track of your business objectives to stay on the continuum to achieving the long term business goals. Developing effective bookkeeping habits facilitates you in keeping an eye on the different aspects and complexities of your business. 

Poor bookkeeping can impact the growth of your business in more ways than one, i.e.  it may lead you into legally complex situations. It is better to develop the following habits to improve your bookkeeping skills and increased effectiveness.

Separate Business Accounts

The first habit you should establish is to keep personal expenses separate from your business expenses. It might seem unnecessary or tedious, however, it’s imperative that entrepreneurs open a separate bank account as soon as they begin their business operations. Choose a bank with flexible banking options that suit your needs, as there are a number of options other than the traditional banks. 

Learn the Basics and Stay Updated

We suggest you have an expert handle all the complex workload that comes with keeping records. That said, you need to have basic knowledge of key bookkeeping elements, as it can make a huge difference to your business’ growth. For instance, if you have to resolve an issue regarding errors in bookkeeping with a professional bookkeeper or accountant. The basic knowledge will help you communicate effectively to reach a solution.

Learn from Mistakes

If you are learning basics and trying to fill the gaps, it’s much easier to correct errors as you discover them. It is natural to have errors and mistakes from time to time. It is important to learn from your errors to intensify the effectiveness of records.

Organize the Paperwork

Keeping your business documents organised over time is a necessity for every business owner. By keeping your financial documents organised, you are easily able to track any query that may arise in the future. Being organised will help you produce any evidence needed if there is any tax investigation.

Don’t Overload

When starting out, small businesses and sole traders usually manage their own books to save money. However, it can be a very time consuming procedure so you need to evaluate if the benefits outweigh the cost. Even though there are templates available online for bookkeeping, the complexities and extra workload might not be worth the extra effort. 

Track Your Cash Payments

Cash payments are not easy to track. It can be stressful trying to manage each and every payment that you make on behalf of your business, especially if you have copious amounts of transactions or if they are of a similar nature. Keeping track of your cash outflow is easier if you use a credit or debit card. It’s also important to make notes to keep track of each expense. If a vendor requires cash payment, then it’ll be easier to track a few payments as opposed to if most of your payments are in cash. 

Invoices are Important

An invoice is a request for payment and a receipt is a proof of payment for goods and services that you have provided. It is important to be vigilant when it comes to keeping accurate records of the transactions.

Compatible Bookkeeping Software

It is important to use bookkeeping software that will suit your business’ current needs. The software should also be able to scale up as your business grows. Bookkeeping software can perform complex functions related to the cash book, general ledger, accounts receivable and payable, and tracking business bank accounts, and much more. It is also more effective than if you do your books manually. 

Conclusion

Opulent Accountants are expert Accountants in Melbourne who work with a large number of businesses, helping them build a strong foundation through effective bookkeeping measures, which in return enable their businesses to grow and develop faster. Call us today on 03 8838 8726.

Leave a Reply

Quote

captcha

Moumita Ghosh
Moumita Ghosh
2020-11-18
Verified review
We've been meeting Dayan for years now and he is great with his advice and is very knowledgeable and pragmatic. We recently used his services to get the home loan for our house and he and his team went above and beyond to get us the best possible deal. Ishara in his team was super communicative and responsive in following through and made the process very easy for us. Highly recommend them!
Cara Neela
Cara Neela
2020-10-24
Verified review
Dayan and Hasi are wonderful, wouldn’t hesitate to recommend them! They went through all with a fine tooth comb to ensure all was correct. Thanks to you both and the Opulent team!
Jason Barry
Jason Barry
2020-09-29
Verified review
I was looking for a different accountant and was recommended to Opulent Accountants. I have been blown away with there service. I wish I moved accountant sooner. Platinum Plumbing Enterprises P/L
Afshin Koohestani
Afshin Koohestani
2020-09-10
Verified review
Uditha Illeperuma
Uditha Illeperuma
2020-09-08
Verified review
Opulent Finance gave professional advice for my unique home loan requirement. They respond quickly with the proper information. The process was smooth and I felt comfortable to deal with the team. The team is friendly and professional to deal with. Highly recommended for any one looking for finance.
Dinesh Fernando
Dinesh Fernando
2020-09-03
Verified review
Very happy with the service provided in getting my tax returns done. Mr. Dayan is very helpful and professional and has extensive knowledge in his field of expertise. Highly recommend if you are looking for a hassle free and prompt service.
Ronald Turner
Ronald Turner
2020-07-16
Verified review
Opulent were absolutely fantastic to deal with, they are competitively priced and incredibly proactive and friendly. For me I have been much better off using their fantastic services as opposed to doing tax returns myself. Sum was amazing, incredibly knowledgable and super friendlyI'll certainly be back with Opulent next year
Milinda Wickramasinghe
Milinda Wickramasinghe
2020-07-05
Verified review
Opulent team has been fantastic and it has been truly a pleasure dealing with the team for more than 10 years. Dayan and Ishara have gone above and beyond to assist and communicated with me even when I was overseas. Excellent service has being provided in a professional and timely manner. I would highly recommend the team.
Chami Ranaweera
Chami Ranaweera
2020-04-28
Verified review
I have been working with Dayan last 9 years. All of my loans, refinance and tax are done through Opulent.Dayan and his team including Ishara are very helpful and easy to deal.
Edmund Lobo
Edmund Lobo
2019-12-02
Verified review
We were new entrants to the cattle farming scene. All the rules and regulations surrounding primary production can be very confusing. The team at Opulent Accountants walked us through all the steps, set up the necessary ABNs and Company / Trust accounts, filed the related pending BAS and Tax returns, and is currently keeping us up-to-date with all ATO related transactions. We recommend them highly to all.