It’s coming up to the end of the financial year. For some businesses, it’s something that their bookkeeper and accountant deal with. For others, it’s a time for end of financial year panic and wishing you’d kept better financial records during the year.
If you’re in the second category, here’s a few things you can do next year to make it all a little easier on yourself.
Find the best way for you
Pick one method of organising your finances and stick with it. Whether it’s an Excel Spreadsheet, pen & paper, Xero, Wave or any other way of keeping records, use it and only it.
Regularly enter EVERY transaction. Whether it’s daily, weekly, fortnightly or monthly, take some time to make sure you enter all your income and all your expenses regularly. If you let it build up too much, it will be a massive task and won’t get done.
You know how you’ll work best, so either do a small amount often (daily or weekly depending on the number of transactions you have). Or, set aside a day or half day every fortnight or month to focus on it. Whatever works best for you.
Be thorough
When you work on your accounts, there are a few things you should do.
- Enter all your transactions. Not just the ones that you have an invoice or receipt sitting on your desk. All of them. If you don’t have an invoice, or you need to look for an invoice, don’t worry too much. Just get the transaction entered.
- Make sure all transactions are properly categorised. Doing this makes it easier to budget. When you know where your income is coming from, and you know where your expenses come from, you can make better business decisions.
- Reconcile against your bank statement. Make sure that your records match what’s happening in your bank account. If not, then you need to figure out why. Don’t put things in the too hard pile. If you know that you’re going to, then get a bookkeeper.
- File your receipts. If you have receipts, file them. Whether it’s in an envelope for the month, scanned and attached to the expenses in your accounting program, or sorted by date and stored in a file. Make it easy for yourself and file them regularly so you don’t have a heart attack at the end of financial year, or when you’re audited.
- Chase up unpaid invoices. I am always stunned by businesses that don’t invoice promptly and chase up unpaid invoices. I know it’s not a fun thing to do, but bankruptcy would be much less fun. Chasing up invoices promptly reminds your clients that they haven’t paid yet. Often, I find that it’s just slipped my clients mind and a reminder always results in prompt payment.
- Put aside money for tax. If you’re likely to have a tax bill at the end of the year, put aside a little money each week / month to cover the expense. That way, you won’t have such a nasty surprise at the end of the year.
Otherwise
If all else fails and it’s just too much for you, get some outside help. I’m going to assume you already have an accountant, but there is a lot of help available:
- A Virtual Assistant can help with most of the above,
- So can a Bookkeeper
- You need a registered BAS Agent to do your BAS, however most bookkeepers probably are. You can check that here: https://www.tpb.gov.au/search-register
- Squirrel Street will scan and organise your receipts and invoices
- Or, there are plenty of mobile apps that scan and save receipts. Get one to scan receipts when you’re on the go.
Basically, my advice is not to try to be something you’re not. If you want to do it yourself, find a way that works for you and that you’ll be happy to do all year. If you know you won’t be able to do it consistently, outsource to someone who will. The only alternative is to just get used to end of financial year panic, and risk losing out on tax refunds and not having a proper picture of how well your business is (or isn’t) doing.
