bookkeeping tips

10 Tips for Reconciling with Smokeball Software

Tips for reconciling with Smokeball software

It’s a great feeling when your trust account is in order and reconciled!

Smokeball is online software, primarily for those working in law and conveyancing. It integrates with Xero accounting software. If you haven’t seen their promotional video with Calista Flockhart, you can check it out here http://www.smokeball.com.au/calista.html.  I got a giggle out of it!

If you’re new to Smokeball, here are my 10 tips for reconciling your trust account.

  1. If you’re moving towards a paperless practice, work from an electronic copy of your trust account bank statement instead of printing off a hard copy. If you open your Statement with Adobe Acrobat Reader you can use the Highlight Text tool to highlight discrepancies or use the Sticky Note tool to add notes. For your first few reconciliations you may feel more comfortable working from a hard copy that’s been printed out, and then progress to using electronic copies later.
  2. Once you select RECONCILE you can’t undo that action. So be sure to fix any discrepancies within that date period first if you can.
  3. Anything that is on your bank statement but missing from Smokeball will have to be recorded in the ADJUSTMENTS tab until it has been fixed and can therefore be ticked at a later date.
  4. Make use of the SAVE DRAFT feature – this will enable you to come back and finish reconciling when you’re ready. You’ll be able to pick-up your reconciliation where you left it.
  5. If you have to reverse a transaction to fix a mistake, it will default to the current day’s date and this date can’t be changed or backdated. You won’t be able to reconcile these entries until you complete the reconciliation for that period.
  6. Don’t select RECONCILE until you have a “0” variance in the brackets below the Reconciliation Balance figure on the right-hand side.
  7. Always record the details/reasons for any Reversals or Adjustments. If someone else logged into your software, would they be able to see a complete story of what has occurred and why? You’re aiming for an easy to follow audit-trail of all your clients’ trust monies and any problems that you’ve fixed.
  8. You can go back and print off your Bank Reconciliation reports at any time, regardless of whether you’ve closed off (clicked RECONCILE) or not.
  9. Save electronic copies of all your bank statements and reconciliation reports in one place and in date order so that they’re easy to find.
  10. Reconcile regularly. The more transactions you have, the more often you should be reconciling to keep on top of it. You don’t want to let your reconciling grow into a bookkeeping monster that you’re afraid to face!

For further information on working with trust accounts, you might like to read my post Working with trust accounts

 

Happy bookkeeping…

Sarina

 

 

 

5 Quick Tips – Investment Property Record-keeping

Investment Property Record-keeping tips

1.  Keep the bigger picture in mind

It’s important that you don’t let your record-keeping overwhelm you – to the point that it discourages your from buying further investment properties. Be on top of your record-keeping from the start and have a simple system that works for you. A good filing system and a spreadsheet for starters. Online software such as Xero Cashbook are an even better option.

2.  The first year is the most complicated

You won’t be able to claim immediate deductions for all your expenses in the first year – some expenses may need to be written off over several years and some may come into play when it comes time to sell. Be sure to keep extra documentation such as your purchase and sale Contracts, conveyancing documents and loan documents. An accountant experienced in preparing Tax Returns for property investors will know the ins-and-outs, but it’s in your best interests to ensure they have access to everything in order to get the best outcome for you.

3.  If you can’t substantiate it, you can’t claim it

Make sure you keep invoices, receipts and bank statements for all property expenditure, as well as proof that your property was available for rent, such as rental listings. Purchase a diary to help keep track of key dates and travel.

4.  Your record-keeping responsibilities aren’t over once a property is sold

Capital gains tax may apply when you sell your rental property. Keep records over the period you own the property and for five years from the date you sell the property.

5.  Protecting your documents

Scan all your receipts and paperwork for safe-keeping and peace of mind. Have you ever pulled out a cash register receipt after 6 months and the writing has already faded? Imagine what it will look like in 5 years’ time.

 

In the words of the Australian Taxation Office:

Keeping proof of all your income,

expenses and efforts to rent out your

property means you can claim everything

you are entitled to.

 

Happy bookkeeping…

Sarina

 

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Is it time to Marie Kondo your accounting software?

Marie Kondo

Does doing your bookkeeping spark joy?

If it doesn’t (and you’re only human) I’m not suggesting you get rid of it from your life completely. It might be a good time to tidy it up though.

Messy data means inaccurate records. Does this really matter? Well yes, because inaccurate records can mean:

  • Paying too much income tax
  • Paying too much GST
  • Underpaying super for your employees
  • Missing out on a bank loan
  • Making bad business decisions because you’re looking at incorrect figures

 

4 common issues that I come across when working with client’s accounting software are:

1.  Doubling-up of expenses

2.  Not reconciling bank accounts correctly

3.  Old unpaid Bills and Invoices

4.  Recording superannuation, GST, PAYG withholding and income tax payments

     using the wrong Account code

 

Here are some examples, using Xero accounting software:

1.  Doubling-up of expenses

You receive a bill from a supplier and enter the Bill into your accounting software. You pay the bill at a later date and when it comes through your automatic bank feed you enter it directly from the Bank Feed screen as a Spend Money transaction instead of closing off the Bill. The bill sits there as unpaid in your system with the expense now being recorded twice.

2.  Not reconciling bank accounts correctly

You merrily work your way through your Bank Feed – hitting the Green “OK” button and watching those transactions disappear from sight. You get the message “Congratulations. You Reconcile!” But wait – your bank had a glitch a couple of months back and several transactions didn’t feed through. You also deleted some bank statement lines because they were for personal purchases. And you had closed off a couple of bills that you never ended up actually paying. The result is missed income and expenses, doubled-up expenses and incorrect Asset and Liability figures in your Balance Sheet.

3.  Not checking for old unpaid Bills and Invoices

Old unpaid bills still sitting in your software can be the result of doubling-up (refer no 1), paying bills from personal funds but forgetting to record them and bills that need to be closed off due to credit notes being issued or contra agreements being made.

Old unpaid Invoices still sitting there might need to be followed up with your customers, or could be mistakes that need to be dealt with, or written off due to non-payment.

4.  Recording superannuation, GST, PAYG withholding and income tax using the wrong Account code

These errors are made really easily, especially if you aren’t familiar with double-entry bookkeeping. Knowing when to use Expense type accounts and Liability type accounts in your software can get confusing. There are also special rules regarding how Income Tax payments get recorded in your software.

For me, the 4 abovementioned issues are the ones that crop up the most. They need to be fixed correctly so that financials are accurate.

And who doesn’t love a good de-cluttering?

 

Happy bookkeeping…

Sarina

 

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Helpful resources for small business owners

Desk diary laptop planning

Sharing some of my favourite (and essential) resources and tools that I use as a small business owner in Australia.


General Business

Australian Taxation Office – information on everything from record-keeping, GST, super, tax, employees and everything in between (recommend subscribing to the Small Business Newsroom)

Fair Work Ombudsman – essential resources if you’re hiring staff

Return To Work SA – worker’s compensation information including whether you need to register and how to go about paying and lodging

Business.gov.au – information, links and guides on starting a business, running a business or exiting a business

ABN Lookup – to check if other businesses you are dealing with have an ABN and if they’re registered for GST

Grant Assist – information on grants available to South Australian small business owners

 

Workshops and Events

Eventbrite – Find workshops and networking events in your local area

 

Inspiration

Small Business Secrets – TV show on SBS. Interviews with various types of business owners around Australia.

(Confession:  I’ve spent way too many hours on a quiet Sunday morning up
binge-watching recordings of this under a rug with a cup of coffee before anyone else
gets up. It’s an inspiring start to the day but then I find it hard to snap out of business
mode for the rest of the day…watch at your own risk).

 

Accounting Software

Xero Australia – popular online accounting software

“We started Xero to change the game for small business. Xero is now one of the fastest growing Software as a Service companies globally. We lead the New Zealand, Australian, and United Kingdom cloud accounting markets, employing a world-class team of more than 1,400 people in 20 offices worldwide. Our beautiful cloud-based accounting software connects people with the right numbers anytime, anywhere, on any device.”
ReceiptBank – popular record-keeping automation software that can be integrated with your accounting software

“Receipt Bank helps small to medium-sized businesses, sole traders, and individuals save valuable hours by pulling information from receipts and invoices quickly, accurately, and efficiently.”

 

Happy bookkeeping…

 

Sarina  

Festival Bookkeeping

 

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3 money tips for salon owners

money tips salon

I’m always on the lookout for ways small business owners can increase their profits or remove stress.  It doesn’t have to be ground-breaking – big or small it all adds up.  As Gary Vaynerchuk says “1 is greater than 0”. I love that saying by the way…. when you feel like what you’re doing isn’t enough or your business isn’t where you want it to be, it gives you reassurance to keep going.

So here are my 3 money tips for salon owners.

Gift certificates

Do you track the gift certificates you give out? Not tracking them leaves you open to fraud.  Tracking them gives you an opportunity to help your clients out if they lose a voucher – you can easily confirm the date, amount and client name.

You can manually track them by giving each one a unique number and noting the number and details in a notebook or spreadsheet. Even better, track them in your salon software. Using your software makes it easy to find valuable information – such as which services are most commonly purchased using gift vouchers.

Discounts

If you give discounts, do you know how much they’re costing your salon? Do you have guidelines for yourself and your staff as to how much is acceptable or is it dependant on how generous you’re feeling that day? You might think you’re only missing out on a couple of hundred dollars a year, but in reality it could be a lot more. If you do your usual amazing job with these clients, do you think they would mind if you stopped giving discounts? Start keeping track for a set period of time – say 3 months.  Times this figure by 4 to see how much you could be out of pocket over the course of a year. Could this money be better spent on marketing to bring new clients in the door or on training a staff member up in a new service offering?

Online bookings

Let clients make their own bookings using online scheduling software, so that you and your staff spend less time running back and forth to the phone.  A common way to manage online bookings is to have your calendar linked to a booking button on your website or business Facebook page. I interviewed salon owner Silvana of Silvana’s Beauty Salon recently – she uses Timely appointment scheduling software.  Using this software for her online bookings has resulted in an increase in business. It’s a win-win situation for both her and her clients. Businesses that aren’t embracing automation risk being left behind and are missing out on opportunities to save time and money. You can read the interview here: Timely Software – A Salon Owner’s Perspective

One of my favourite business books is called The Naked Salon by Lisa Conway.  Salon owners – if you have a chance to get your hands on a copy, you won’t regret it – whether you’re just starting out or have been in business for years.

For more information on Timely online appointment scheduling software, you can find their website here.  The website also has a great blog with salon owner interviews, tips and industry news.

Happy bookkeeping…

Sarina

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5 payroll pitfalls to avoid over the Christmas break

Christmas cards festival bookkeeping

With only a week to go until Christmas many small business owners are desperately trying to keep everything together and make it through this busy time of year.  It’s not just running a business, it’s also end of school functions, sport functions, work functions, organising pets and holidays, organising food and getting the present shopping done.

If you have employees then you can also throw payroll issues into the mix as well.  The Christmas period brings with it a few extra challenges to face as an employer, so I’ve prepared these 5 tips to help you through so you’ve still got some wind left in your sails to enjoy the silly season. These tips apply to Australian readers, but will give other readers some ideas as to what they need to look out for as well.

1. Christmas bonuses and super

Bonuses are considered Ordinary Time Earnings (OTE) and must therefore be included in your calculation of the super guarantee for your employees. More info on bonuses here.

2. Asking employees to take Annual leave

This is really interesting and can be a bit of a touchy topic for employers and employees.  When I was an employed bookkeeper I was asked to use up some of my annual leave – not just over the Christmas break but when I had a bit accumulated during the year.  An employer can only direct an employee to use up their annual leave in some situations. There is often an amount of notice you must give your employees as well. You need to check the relevant Award or Registered Agreement to see under what circumstances you’re allowed to direct your staff to take annual leave.

2. Rest breaks

Many businesses are busy this time of year, however there is a maximum amount of hours you can make your employees work without a break. Check the Award or registered agreement that your employees come under. For example, the Clerks Private Sector Award 2010 stipulates (at the time of writing) that employees who work for 5 hours or more must get at least 1 meal break.  More info on Awards and break entitlements here.

4. Casual vs part-time vs fixed term

There are differences between casual employees, part-time employees and fixed term employees – and yes, the onus is on the employer to ensure they have categorised the employee correctly and have given them the appropriate entitlements. You may hire someone on a casual basis over the Christmas break but the actual working conditions may change over time and their entitlements should be reviewed accordingly.

5. Christmas parties

Ahhh … Christmas parties.  What to claim and what not to claim? There are rules around when you can claim a tax deduction, when you can claim GST credits and what you need to pay fringe benefits tax on.  First you need to determine if the food and drink you’re providing is considered “entertainment” in the eyes of the ATO.  You need to look at why the food and drink is being provided, what type, when it’s being provided and where (on or off business premises). You can find the ATO’s rules regarding providing entertainment and the associated taxes here. There are some helpful scenarios that walk you through the process of deciding what to claim.

Wishing everyone a great Christmas.

Happy bookkeeping…

Sarina

 

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Which scheduling software?

Diary glasses

Continuing on from my post “Cliniko + Xero”, I wanted to share some more thoughts on scheduling software.  In particular, scheduling software that integrates with Xero.

I found that once I started looking into these types of software solutions it was like a vortex dragging me in deeper and deeper.  So many options – all offering slightly different features and aimed at slightly different target markets.  It took all my willpower not to drown in the sea of information and to remain focused!

So after extensive research, I came up with 5 software solutions that all have something to offer the small business owner looking for scheduling software.  Some are more suited to the health and well-being industry, some are aimed at the hair and beauty industry and some are general in nature and could suit consultants or personal trainers. They’re all hosted in the cloud, so no need to mess around installing software. Being hosted in the cloud also means you can access them from mobile devices. They all offer the ability for the business’ clients to book appointments for themselves online.

Once you outgrow booking in client appointments with paper and a pen, these types of software solutions are a huge asset to the busy business owner. They offer so much more than appointment scheduling and are complete practice management systems.

I’m only covering the basics here.  This list doesn’t cover everything that you’d want to know before making a decision to commit to one solution over another.  It will give you an idea of some of the differences, though, and an idea of cost.  Prices are in Australian dollars and include GST (as at the date of writing).

xero scheduling app comparison

My research has uncovered many more variables between each of the products listed.  Each of your businesses is unique and has its own needs – I would recommend you delve deeper than this table and look beyond the “features” listing on the respective software websites.  Alternatively, invest in the services of a Xero adviser who can do the research for you. It will save you a lot of time and they will also be well placed to assist you with your Xero integration if needed.

Looking forward to sharing more of my findings – there are some great small business solutions out there that integrate with Xero.

Happy bookkeeping…

Sarina

 

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