Bookkeeping, what is involved?

SMALL BUSINESS

This blog aims to summarise the basics of bookkeeping and how this service fits into business operations. Transaction recording and reporting must be accurate and verified and timely.

This includes recording transactions, which is now almost all done in software but can be done using more traditional paper processes if businesses have not yet taken that step. This is the recording of day to day transactions across a business.

These transactions include creating and issuing quotes and issuing sales Invoices, sales credits and refunds, supplier purchase invoice recording, supplier credit notes and refunds, asset purchases, the recording of loans and other finance including hire purchase and leasing, to name a few.

Put simply, a bookkeeping service usually includes processing of Accounts Payable (creditors), Accounts Receivable (debtors), the processing of Bank Reconciliations, Fixed Asset register maintenance, filing and recording systems and Expense processing.

Payroll services, Apprenticeship Claims, Long Service Leave can be included where applicable and a host of other regulatory and finance and administration tasks that may be relevant such as Payroll Tax, Workers Compensation.

Payroll in Australia is a complex area especially since the Australian Taxation Office introduced Single Touch Payroll (STP) which is real time reporting of payroll with a breakdown of detail included. It is wise for any small business with staff to have a payroll professional process this for them. BAS Agents are generally qualified to process payroll but it is always worth confirming if Agents handle payroll before you hire them to do payroll work for you. It is easy to make mistakes and much harder to fix them than to get it right in the first place. STP is all part of the digital automation of processes that is taking place.

At its simplest, payroll includes the correct recording of hours, superannuation, bonuses and commissions, allowances, to name a few elements. Payroll processing can be weekly, fortnightly, monthly or quarterly and includes bonuses and other payments. Payroll services can include payment at the bank of the above too.

GST needs to be recorded correctly for all these transactions.

Stamp duty and other ‘no GST’ transactions need to be recorded correctly too.

These need to be checked for accuracy and timeliness. There are many regulatory requirements that the accounts must comply with.

Most bookkeepers, but not all, are BAS Agents, which means they can make sure your accounts are correct with respect to GST and the various PAYG (Pay As You Go) withholding requirements.

There are a few industries which are required to submit a Taxable Payments Annual Report (TPAR), and other lodgements which can be checked and processed by a BAS Agent include Superannuation, IAS preparation (monthly PAYG), BAS preparation, SG Charge Statements (for overdue/late paid super), STP finalisation (Payroll), GST registration, PAYGW Registration, Liaison with ATO, Fuel Tax Credits, Wine Equalisation Tax.

Services offered above and beyond those mentioned above are unique to each bookkeeper’s business. They might include Cash Flow Management, Budgeting, Debtor Management, Other Advisory Services, Audit Preparation, policy drafting, Company secretarial services.

This is the whole broad employment and payroll service. It involves the management of people. It includes Employee Onboarding – this process involves getting enough personal details to record an employees employment whether or not they are full time, part time or casual, Employee Offboarding – includes all aspects of termination, monitoring of relevant Awards, Leave Requests, Policies and Procedures and Contractor Management.

Management reports are reports to be used internally within the business, as opposed to Financial Statements which are for external use. Management reports are less formal than Financial Statements. There are many rules in the accounting standards which dictate the exact layout and formatting of Financial Statements. Most small businesses have need only for management reports, but it is important these reports are accurate and in a useful format.

Many bookkeepers are continually assisting their clients in the use of their accounting software, or training in various aspects of changes in legislation impacting day to day operations. EDGE SME only use Xero accounting software. We assist small business with data file checks, accounting software file setups – for new clients, or for clients who have more than one entity.

Whilst the end of financial year is just a date, there are many elements of transaction recording that need to be finalised at this time. There is a whole blog on end of financial year processing at this link https://edgesmefinancial.com.au/eofy/.

You must confirm the expertise in the area you are seeking before you engage a bookkeeping professional. This is difficult when you do not understand it yourself, so seeking the opinion of a qualified friend and/or your tax accountant is a good idea.

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