Maintaining up-to-date and accurate accounts enables you to see how well your business is performing.
A sound bookkeeping system ensures your financial transactions are put into the right categories of revenue, expenses, assets, liabilities and equity.
Putting your transactions into their correct ‘slots’ enables you to produce accurate financial reports, create budgets and develop an action plan for the future.
There are some very affordable quality software programs on the market to help you with your bookkeeping, such as QuickBooks, MYOB and XERO. These start at only a few dollars a month for a subscription.
Bookkeeping is also essential for government compliance. The ATO stipulates that you need to be able to explain all financial transactions that go through your business. This includes having a tax invoice or receipt for all your expenses – at least as much as possible.
If your business is registered for GST you will also need to regularly report to the ATO, pay any GST due, and have backup documents for any expenses over $82.50.
There can be some stiff penalties for not keeping up with compliance, so it makes good business sense to keep your financial transaction records up-to-date and accurate.
You might also want to consider Audit and Investigation Insurance, as it provides financial protection in case of government investigations and audits.