accounting

If your laptop was stolen

Laptop sofa ipad working

So this is a subject that I feel strongly about. Something I’ve had the misfortune of experiencing recently.

I have a couple of questions worth thinking about.

If your laptop was stolen, what would be the impact on your clients? What would be the impact on you personally and your business?

Would you lose all your marketing materials, invoices, expensive promotional photos, business plans, written procedures, client testimonials, eBooks, training materials?

Would your client’s confidential information be released out into the big wide world? What would your client’s reaction be? Would your business even recover from that?

Would you lose personal photos that you never got around to printing?

If your laptop gets stolen you don’t, unfortunately, get to choose the day it’s going to happen. You don’t get to say “well I think my laptop might disappear into the hands of strangers tomorrow so tonight I’ll run a backup”.

Backing-up data daily has been a part of my routine from day 1 of working for a hire company here in Adelaide many years ago. They ran a tight ship and I’m glad for that great foundation right from the beginning.

Things to do today:

Buy a couple of USB’s. Label them. Make a copy of everything on your laptop regularly. Put the USB’s somewhere safe (taking a copy off-site means you still have a copy if you get fire or water damage in your office).
Consider backing up to the cloud as well.
Run a search in File Explorer for “password”. Have you got documents that contain passwords for you or your clients? Change the word “password” to something else.
It goes without saying you shouldn’t have a document actually called “passwords’!
Log into all your websites that require a password. So emails, accounting software, online banking etc. Ensure that none of the passwords are stored. I know it’s a right pain having to remember every different password (but I still hope you’re not using one password for everything, right?).
Set up a password for initial access to your iPad and laptop, so that it’s difficult to even get past that first login screen.
Lock-up filing cabinets and paper shredders are a must if you have confidential client information in your office.

If you’re like me you may be security conscious when going away for the weekend and you probably also make sure you don’t leave technology in the car when you run into the shops, but what I didn’t realise was just how common home and office break-ins are during broad daylight. School pick-up time is a common one! Not a nice experience for anyone.

Please back-up, lock-up and password protect.

Happy bookkeeping…

Sarina

P.S. I often share small business tips on Facebook and Instagram – just search for Festival Bookkeeping. Look forward to seeing you there.

More free resources for small business owners:

Working with trust accounts

Book glasses plant bookkeeping

Those working in the legal or real estate industry would be familiar with trust accounts.

I started working with trust accounts in my teens when I was employed by law firms. Now as the owner of Festival Bookkeeping I’m once again working with trust accounts on behalf of clients.

It’s important that the money held on behalf of clients can be fully accounted for every step of the way. In fact in many circumstances firms must have their trust accounts professionally audited once a year to ensure trust account legislation is being complied with. So by working with trust accounts you are taking on another level of responsibility, in addition to the usual tax responsibilities that come with small business bookkeeping.

With that in mind, here are some of my top tips for working with trust accounts:

Do not overdraw (cause a deficiency of) a client’s trust ledger
Perform regular backups of trust accounting software & store a copy off-site as well
Ensure you have the details of every client whose money you hold
Avoid single trust transfers between unrelated parties if possible (eg vendor to purchaser)
Keep all cheque butts and ensure all cheque numbers are accounted for in sequential order
Do not pay general office expenses, debts or bank fees from trust monies
Check with the governing body of your industry as to what accounting software is suitable for your trust accounting. In some circumstances the software you use to track your business income and expenses is not suitable to use for your trust accounting.
Keep the details of any errors or discrepancies that have occurred and/or been fixed
Don’t draw “cash” cheques
Finally – reconcile regularly

Be sure to do your research and check which legislation applies to your industry and state.

As with any small business bookkeeping, errors can occur but if they do make sure you have a “paper trail” or explanation of what occurred and how it was fixed. Fix mistakes promptly and don’t hang onto client’s money any longer than necessary. Regular reconciling will help pick up any differences between your bank account activity and your accounting records. A good bookkeeper can help you with this task.

Festival Bookkeeping specialise in helping Australian conveyancing firms with their bookkeeping needs – including trust account reconciling using software such as Smokeball and CATS. You can find out more about us on our website: http://www.festivalbookkeeping.com.au/

Happy bookkeeping…

Sarina

My 3 favourite productivity tips

Handbag purse calculator phone

“You’re off to great places! Today is your day! Your mountain is waiting, so get on your way!” Dr Seuss

As a business owner, your productive days are the ones that keep you moving forward. They keep you one step ahead of the competition. Importantly, they mean that you can put your feet up at the end of the day with a smile on your face, feeling good about your day and what you’ve achieved.

Today I’d like to share my 3 favourite productivity tips to help you, in Dr Seuss’ words, get on your way!

Play music

Playing music whilst working BUT…only when doing easy tasks I don’t need to think too hard about. For me this includes scanning documents for filing & uploading receipts to my software. It’s surprising how much work you can power through when you have music to boost your mood and it’s almost like a reward for getting through your tougher work earlier on.

Use online invoicing software

Is this how you prepare Invoices? Open up a Word document, change the Invoice number (after checking it’s the next number), add the customer name and details, save it, attach it to an email, type up a professional-sounding email message, send. Oh and remember to back-up all your Word documents in case your laptop fails etc? Well you have probably already guessed what I’m going to say. Of course there are much more efficient, hassle-free ways to do your invoicing and this includes using online invoicing software. Using your mobile or iPad you can send an invoice to your customer whilst you are right there with them and you know they’ve received it. If you send the same invoices to customers every month, you can set up recurring invoices to go out in a fraction of the time than if you had to do it manually each month. For those in the UK, you can try Quickbooks’ online invoicing software free for 30 days.

Do the difficult tasks first

This is a gem of a tip that has really helped me in my business and in life overall actually. It sounds so simple, yet it can have huge productivity benefits. When the weight of a difficult task is lifted off of your shoulders you really do fly through the rest of your day feeling confident and able to tackle anything. I’ve come to believe that success comes to those willing to do the difficult things others put off doing. Pick up the phone and make those difficult phone calls first thing in the morning before you have too much time to think about it. Head out the door and introduce yourself to potential clients. Leave the fun stuff like updating social media until after the uncomfortable stuff is out the way. I tend to overthink things and before I know it part of my day is gone whilst I wait for myself to “feel like” doing the tough stuff. Since adopting the habit of doing the difficult tasks first I wouldn’t do things any other way.

So for me being productive is all about working smarter and not harder, embracing technology and remembering to reward myself. Not all of my days are productive ones, and that’s okay. As a bookkeeper sometimes I get weighed down with the numbers and just need a good break so I can come back and tackle my work another day with fresh eyes!

Let me know – how do you stay productive? Have you changed your habits and become more productive?

Bookkeeping tips for tradies

Tradies tools drill spanner

Receipts

Keeping receipts can be annoying and it’s easy for them to get damaged or lost, but when you think about each one as another tax deduction they take on a whole new meaning. My top tip is to take a photo of each one so you can save it electronically. The Australian Taxation Office accepts digitally saved copies of receipts that can be clearly read. Keep a plastic or material folder in your ute or van, write “Receipts” on it and put each receipt in here for safekeeping until the end of the week or month when you have a chance to enter it in your books. Once recorded, file it away in a labelled folder in date order. I keep electronic copies of all receipts, save a copy within my Xero accounting software and also have back-up copies on my laptop and a USB.

Don’t mix personal with business

One of the first things you should do is to open a separate bank account, solely for business purposes. Use this account for business spending only and ensure all customer payments go into this account. Mixing business and personal spending can turn into a headache very quickly and can be easily avoided.

Vehicle expenses

As a tradie your business vehicle is probably your daily transport, storeroom, office, lunch room etc etc. You are going to cover a lot of kilometres in a year and so it’s important to get the right amount of tax deductions. There are a few different methods of claiming your vehicle expenses – the ATO website explains them pretty clearly.

Equipment

You will no doubt have invested in good tools and safety equipment that are used in the running of your business. Keep the details of all this equipment. This can be done in a basic spreadsheet or Word document. Include price, brand, serial numbers and where you bought them. This will help with end of year depreciation (something your accountant can do for you) and is also helpful for insurance purposes.

Get a record-keeping system in place ASAP

This can be an Excel spreadsheet or accounting software – the important thing is to get a system early on. Your priority in the beginning may be knowing you have consistent work and enough cash in the bank to cover your immediate expenses, but down the track being able to get easy access to your financial information (most profitable services, which clients are slow payers etc) can be the difference between having a struggling business and a growing, successful one. If you have the funds I would recommend using accounting software from the beginning. A good bookkeeper or accountant can help you choose. My tip is to get a free trial, make sure it does everything you need it to and that your bookkeeper/accountant can work with it. I previously made a short video called 3 Simple Steps to Getting Your Bookkeeping Sorted. You might also like Do I Need to Use Accounting Software?

Keep an eye on your bank account

If you get into the habit of checking your bank account regularly you will get a feel for what time of the month loan payments come out, when funds are running low, if there is any suspicious activity etc. My software is linked to my bank account and every day I can see any bank activity from the day before.

Get customer contact details

Preferably more than 1 type in case you need to follow up unpaid invoices. If you are extending credit to some customers by allowing them to pay at a later date, it’s only a matter of time before you find some customers that won’t pay you on time or will try to avoid paying altogether. By having several ways to contact them (email, phone, letter) you can follow up unpaid invoices easily. My top tip – keep a written record every time you contact a late paying customer and include dates, what was agreed and who you spoke to. For more help on this topic read Top 6 Tips – Keeping on Top of Customer Payments.

Plan for tax

Open a separate bank account and transfer a percentage of your income aside each month or quarter. Tax time can be stressful when you are running a business so avoid having that extra worry of trying to come up with a large amount of money for tax in one hit.

GST registration

At the time of writing this post the GST threshold is $75,000. Keep your eye on your GST turnover throughout the year to see if it’s edging towards the threshold – at which point you’ll need to register. For more of my tips on GST read Common GST Mistakes and BAS Tips for Aussie Small Business Owners.

Insurance

Make sure you have the right insurances. As a Registered BAS Agent I have to have certain insurances in place in order to keep my licence and this is also the case with many other professional bodies.

Thank you to all my readers of the Savvy Bookkeeping Blog. You may have noticed I love writing about small business and not-for-profit bookkeeping. I share more useful and fun bookkeeping information and videos over on my business Facebook page – Festival Bookkeeping. Why not come over and follow me there? Love to hear from you.

Happy bookkeeping…

Are you an Uber driver?

delorean-uber

The sharing economy is such a hot topic right now. Think Airbnb, Uber and Airtasker.

If you bring in income via the sharing economy you might be disappointed to learn that tax rules apply to the sharing economy just like they do to the rest of the economy.

The Federal Court of Australia has handed down its decision that ride-sourcing is taxi travel. For GST purposes, the word taxi means a car (vehicle) made available for public hire that is used to transport passengers for fares. Don’t be caught out thinking that you earn less than the current GST registration threshold of $75,000 – it doesn’t apply to ride-sourcing enterprises!

In Australia, if you operate a ride-sourcing enterprise you are required to:

keep records
have an Australian business number (ABN)
register for GST, regardless of how much you earn
pay GST on the full fare received from passengers for each trip you provide
lodge activity statements
include income from ride-sourcing in your income tax returns.

Not sure if what you are doing is considered running a ride-sourcing enterprise? Australian Taxation Office website provides more information:

Providing taxi travel services

Happy bookkeeping…

Looking for more related tips?

BAS Tips for Aussie Small Business Owners

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If you are registered for GST in Australia, then you would be familiar with a little old thing called the Business Activity Statement (BAS). No doubt you have also spent many an hour researching the ATO website trying to figure out one thing or another in order to get your BAS completed and lodged in time. Unless, of course, you have a trusted BAS Agent to take this time-consuming task off your hands.

Here are a few tips for preparing and lodging your BAS that will hopefully save you a bit of time and stress.

If you are due a refund on your next Business Activity Statement, you must make sure any outstanding BAS have been lodged. Why? Because the ATO won’t pay your refund until they know the full story regarding your GST payable or refundable.

A lot of businesses sell gift vouchers. You may not be aware that you don’t claim GST collected at the time of selling the gift voucher unless the voucher is for a specific product or service. For example, if I run a hairdressing salon and sell gift vouchers than can be redeemed for anything in the salon then I don’t claim the GST on the sale until the recipient of the voucher comes in and uses the voucher. This is one of my favourite pieces of GST legislation I’ve come across. (Okay, don’t judge me).

Registered for GST and you sell food? It can be difficult to determine whether some types of food you can charge GST on. You can find out the GST status of more than 500 (yes 500) food items via ATO’s detailed food list. Who would have thought? They also have handy flow chart to help you decide.

You can’t claim the GST paid on purchases if your supplier isn’t registered for GST. It goes beyond receiving a Tax Invoice with an ABN and a GST charge included – this isn’t proof that they are in fact registered. Use the ABN lookup tool to find out whether individual suppliers are registered for GST here: ABN Lookup Tool

Disposing of a capital asset eg vehicle, factory equipment? This is still a taxable sale, even if you sell to an individual and not another business. The sale will need to be reported at G1 Total Sales on your BAS. Trading in a car is usually considered a taxable sale as well, and will need to be reported on your BAS. More specific information can be found on the ATO website here: GST and Motor Vehicles

Don’t forget that if you outsource your BAS preparation and lodgement to a bookkeeper, they must be a registered BAS Agent. GST is a tax and bookkeepers must have the necessary qualifications, substantial hands-on experience and be continually refreshing their knowledge of GST law.

Are you registered for GST? What do you like/dislike about having to complete your own IAS or BAS?

You might also like these other posts with bookkeeping tips:

5 great business blogs you should be following

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In the 4 years I’ve been writing about bookkeeping on my website The Savvy Bookkeeping Blog I’ve learned a lot from reading other people’s posts on small business.

Here are some of my favourites that I’d recommend having a look at if you’re needing inspiration or tips to run a successful business.

Insanely Clever Marketing

https://insanelyclevermarketing.com/

Penelope is a fellow Adelaidian whose blog covers not only marketing, but also office design and style, as well as office fashion.

One of my favourite posts: Where the heck is your branding? Get it recognised now

Cath Cox

https://cathcox.com/

Cath runs her own massage practice in the U.S and I love this blog because it’s such an honest insight into running a business and what has and hasn’t worked well for her. Cath’s blog has tips on such things as handling your small business taxes, getting new customers and much more.

One of my favourite posts: How to show clients you love them

Adventures of a QBO Bookkeeper

https://qboadventures.com/

Jennie is a Canadian bookkeeper and has a tonne of great stuff on her blog including articles, small business app reviews and videos. Jennie manages to make bookkeeping fun (what??).

One of her short videos: What is cloud accounting Jennie – I don’t get it.

Steve J Bicknell

https://stevejbicknell.com/

Steve Bicknell is an accountant based in the U.K. and is very generous in the free content he makes available for readers. If you are a business owner based in the U.K. you are going to get a lot out of this blog.

One of my favourites posts: Do you want to work for yourself?

Colin Sander

https://colinsander.wordpress.com/

Colin is based in New Zealand and is the founder of Top Performers. His focus is to “find ways for people and businesses to achieve more from less.” I particularly learn a lot from his sales-focused posts but there are lots of other areas he covers as well, including: 5 Tips to manage overload

All these bloggers regularly post content so you’ll always have something new to read – and in the true spirit of blogging they are extremely generous in the professional advice they give for free via their posts.

Happy reading…

Xero – One of the features that saves me time

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There are a lot of features Xero has that save me time whilst I’m ~~wading through~~ merrily singing my way through my bookkeeping.

One of my favourites, though, is one of the most simple and basic features that Xero offers. The feature I’m talking about is copying transactions.

To give you an example, I do very similar work for a client each month, with a few changes here and there. Because I like to be transparent in how I charge I include extra detail so that clients can see exactly what I’m charging them for – therefore my Invoices can sometimes be lengthy. I wrote about this in my previous post 3 Simple Tips to Improve Cashflow. I don’t invoice at the same time of the month every time, so automatically repeating Invoices isn’t the best option in this case.

When I’m ready to charge those clients I simply search for that client’s name in Xero, click on the last Invoice and copy that Invoice. I copy by selecting Options then Copy in the top right hand corner. I can then tweak it with any adjustments needed, but the bulk of the information is already there and my wording is consistent from one Invoice to the next.

Copying also works for transactions like Spend Money and Receive Money as well.

I try to remember to work smarter and not harder and this is one of those simple things that makes a difference when it comes to the sometimes very time consuming task of small business bookkeeping.

What is one way you work smarter and not harder?

Other tips on working smarter, not harder:

Happy bookkeeping…

Small business owners – Wages or Drawings?

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The issue of paying yourself money from your business can be confusing.

Technically, a Sole Trader cannot employ themselves. Money a sole trader takes out of the business for personal use is classified as “drawings” and is not considered wages for tax purposes. Drawings are not allowable deductions for the business.

Transactions that you record using the account Drawings are not reported in Activity Statements that are lodged with the Australian Taxation Office.

This is also the case for someone who has their business set up as a Partnership. At law, you cannot be an employee.

If your business is set up as a Company, you can be an employee of the company. You can pay yourself wages and would therefore withhold PAYG withholding tax if your wages are above the tax free threshold. Unlike drawings, wages are allowable deductions for the business.

Transactions that you record using your “Wages” accounts are also not reported in the “Goods & Services Tax” section of your Activity Statements – only the “PAYG tax withheld” section.

Because Drawings and Wages are both outside of the GST system the tax codes to use in your accounting software are as follows:

Xero = BAS Excluded

MYOB = N-T

Reckon Accounts = leave the tax code blank

Happy bookkeeping…

The post in which I mention bookkeeping & fun in the same sentence

ipad-and-receipts

Okay, so I may have a warped sense of what constitutes fun – but hear me out on this one. If you find bookkeeping a pain in the butt and a necessary evil in order to keep the taxman happy, then take 5 minutes to read my:

6 ways to make bookkeeping fun!

Get creative! Jazz up your accounts files with some nice labels or replace your folders with colour co-ordinated ones. There are some really nice colours out there now, and you can colour co-ordinate your whole office.
Every time you finish your bookkeeping tasks for the week, reward yourself with a little of something that puts a smile on your face. (Did somebody say chocolate?)
Take time out to meet other business owners and attend a bookkeeping workshop. As well as picking up some hints and getting you enthused about getting back to your bookkeeping you’ll probably get a morning or afternoon tea thrown in as well. There are workshops that cover debt collection, payroll, tax, software, cloud computing and lots more.
Have your favourite music playing quietly in the background, grab a glass of wine (or maybe just half in my case or else my accounts would be a shambles) and enjoy the time to yourself.
Get organised. Have a spring clean of your accounts documents and files and feel good about how organised you are. I’ll be writing more on accounts organisation a little down the track (try this post here).
Follow a blog that motivates you in your quest for business or career success. A couple of goods ones are:
http://under30ceo.com
http://flyingsolo.com.au

If none of these ideas really appeal to you, you could always pay someone else to do it while you go out and have your kind of fun!

Some other bookkeeping posts you might like:

How do you keep motivated to do your essential bookkeeping tasks? Let me know in the comments below.