festival bookkeeping

9 Reasons You Should Be Reviewing Your Profit & Loss Report

A profit and loss (or income) statement lists your income and expenses. It tells you how much profit you’re making, or how much you’re losing.

It’s one of the most important financial documents your business will need to produce. Successful business owners review their Profit & Loss regularly.

Here are 9 great reasons business owners should be reviewing their Profit & Loss report on a regular basis:

1. Tax Planning

If your bookkeeping is up to date, you’ll be in a position to discuss tax planning strategies with your accountant before the end of the financial year. It’s in your best interests to be familiar with your Profit & Loss so that you understand your discussions with your accountant and their recommendations.

2. Meeting Statutory Obligations

Preparing your Tax Return is probably the most obvious reason you’ll be needing an up to date P&L. When you’re signing off for your accountant to lodge your Tax Return on your behalf, you’re accepting responsibility for the figures that have been provided for it’s preparation. By becoming familiar with your P&L, you’re putting yourself in a better position to understand what you’re signing.

3. Goal Setting

You cannot set appropriate income targets unless you know what your current income is.

4. Pricing Strategy

Your revenue may be increasing, but if your expenses are increasing at a greater rate, then it may be a sign that your pricing hasn’t kept up with your growing costs.

5. Warning Signs

If the business isn’t making a profit, you can take corrective action to turn this around

6. Selling Your Business

Your Profit & Loss report can demonstrate your businesses’ profitability and can increase the likelihood of a successful sale. Get to know your P&L so you can gauge when it’s a good time to consider selling.

7. Cashflow Management

Reviewing your P&L regularly will give you an idea of whether you will need to set more or less money aside to cover any anticipated tax bills.

8. Decision Making

A P&L helps a company’s management team to understand the business’s net income, which may be helpful in decision-making processes. For example, a business owner may consider whether his or her company is bringing in enough of a profit to justify renovating their building or expanding in other ways. It can help a business owner decide whether they can hire their next employee, or whether they can give staff bonuses or wage increases.

9. Obtaining Finance

Lenders and investors will evaluate your net income and operating expenses, debts, and taxes to ensure your business is viable and worth providing financial assistance to. Do you know if now is a good time to approach lenders for funding?

Final Thoughts

Simply put, you need to be reviewing your Profit & Loss report on a regular basis if the success of your business is important to you. It’s not enough to know you’ve got cash in the bank or that business is “busy”, so everything must be okay.

How often are you reviewing your Profit & Loss? Is your bookkeeping up to date so that you can in fact have an accurate Profit & Loss report in-hand each month?

Happy bookkeeping….

Sarina

Festival Bookkeeping are Xero bookkeeping specialists located in Adelaide, South Australia. We have happy clients Australia-wide that are succeeding and growing in business, while we take care of the books.

About the author

Sarina Abbott is the owner of Festival Bookkeeping. She’s a registered BAS Agent and Xero adviser who has previously worked in the legal and conveyancing industry, as well as for a registered training organisation. She lives in Adelaide, South Australia with her husband and 2 sons.

You can find out more about the team at Festival Bookkeeping here

Xero Payroll – 4 Common Mistakes

Xero payroll is a great option for the Australian small business owner with employees. Xero even has a subscription level where you just pay for payroll and not the rest of the accounting functionality. Some business owners choose to continue using their other accounting software, but use Xero just for their payroll due to it being more cost effective.

At Festival Bookkeeping, we process payroll on behalf of many of our clients. We also help some business owners set up Payroll if they’re going to do the processing themself. Sometimes we’re just needed to support our clients for those tricky extra tasks such as finalising Single Touch Payroll for the year or processing a final payrun.

We see some common errors pop up from time to time and thought it was worth a blog post to highlight some areas of processing payroll that you may need to double-check.

1. Leave – Accepting Xero’s Suggested Hours

When a Leave Request is entered into Xero, Xero will suggest the amount of hours to process based on the dates you’ve entered. It’s important to check what Xero has suggested because it may not be right in your particular circumstance. Make sure you’ve done the calculation yourself as to how many hours of leave they’re taking so that you can check you’re processing the leave request correctly in Xero. You can simply overtype what Xero has suggested with the correct hours if needed.

2. Forgetting to File Single Touch Payroll

When business owners are paying their employees, often their main focus is processing the correct hours and ensuring they pay the correct amounts when doing their online banking. The introduction of Single Touch Payroll has added one (in fact many) more payroll tasks to our list. The ATO requirement is that you report a pay event to the ATO on or before the pay day, however many business owners aren’t aware of this. It’s very easy to forget to press the “FILE” button once you’ve done your pays – however to keep your business ATO compliant, it’s in your best interests to find a way to remind yourself to File in time.

Tip: You may even find sticking a post-it note reminder somewhere or adding a reminder in your online calendar to check it’s done before closing off your computer for the day is a good solution for you.

3. Incorrect Payment Date

In Xero you can manually change the date of the wages payment. This is something commonly done over the Christmas holiday period where you might be processing wages ahead of time. Don’t forget to check the Payment Date is correct, and change it if necessary before posting your payrun.

4. Public Holidays

If you use Timesheets in Xero, you or your employees may have typed hours into the box for a day that was actually a Public Holiday day where they did not work. For employees who are entitled to be paid for public holidays where they didn’t work, the easiest option is to always leave the field for that day blank in the Timesheet and process the pay for the public holiday in the payrun itself. Have you noticed in the Employee section of Xero that there is a box there to tick to “Include holidays in Payslips”? This is a great way to ensure you get public holiday pays correct in Xero. You may even have forgotten that there was a public holiday to account for and having this come up automatically in your payrun can be really helpful. If you have part-time employees, don’t forget to check that the public holiday did in fact fall on a day they would usually work. It can easily be removed from the payrun if it isn’t applicable in your particular circumstances.

Happy bookkeeping….

Sarina

About the author.

Sarina Abbott is the owner of Festival Bookkeeping. She’s a registered BAS Agent and Xero adviser who has previously worked in the legal and conveyancing industry, as well as for a registered training organisation. She lives in Adelaide, South Australia with her husband and 2 sons.

You can find out more about Festival Bookkeeping here.

How to get copies of your Facebook receipts

Using Facebook ads is a popular way to market your business. Being relatively new to creating paid Facebook ads, I do find that a lot of my time and energy is spent on coming up with the marketing material and then navigating my way around Facebook Ads Manager (Arghh, so many decisions. So much time spent going around in circles).

Adelaide bookkeeping Festival Bookkeeping — How you feel when you’ve finally finished creating your Facebook ad campaign!

And then the fee gets deducted from your bank account. If you’re a Xero user, you’ll see the charge come up automatically in your bank feed the next day and know what you’ve been charged and when. So now you need to take care of the bookkeeping side of things as well.

As an Australian business owner we know that we need copies of receipts in order to keep the tax office (and therefore our bookkeeper) happy. We do know that, right? Oh good.

So here are the steps needed to download a receipt for your Facebook ad:

Go to your business Facebook page.
Click on the Ad Centre drop-down arrow on the left side-bar
Click on ALL ADS
Click on the blue ADS MANAGER in centre of screen
Click on 3 Bars under the Home icon
Click on BILLINGS (suggest you bookmark this page for easy access)
Change the date range in the top right corner, to include the date of the receipt that you’re looking for. Click Update
Under the “Action” heading, click on the Download button next to the receipt you want
Save to an appropriate folder in your computer.
Bonus points if you attach the PDF to your transaction within Xero.

OR, alternatively, if you’re more familiar with Business Suite:

Go to your business Facebook page.
Click on BUSINESS SUITE on the left-hand side
Select ALL TOOLS
Hover over the black sidebar to the left to view all the options
Click on MORE TOOLS
Under MANAGE select BILLING (suggest you bookmark this page for easy access)
Change the date range in the top right corner, to include the date of the receipt that you’re looking for. Click Update
Under the “Action” heading, click on the Download button next to the receipt you want
Save to an appropriate folder in your computer.
Bonus points if you attach the PDF to your transaction within Xero.

If you’re unsure whether you’ve provided Facebook with your ABN, look for it in the bottom right-hand corner of your Receipt.

Happy bookkeeping….

Sarina

About the author.

Sarina Abbott is the owner of Festival Bookkeeping. She’s a registered BAS Agent and Xero adviser who has previously worked in the legal and conveyancing industry, as well as for a registered training organisation. She lives in Adelaide, South Australia with her husband and 2 sons.

You can find out more about Festival Bookkeeping here.

Help! Why doesn’t my trust account reconciliation balance?

Why doesn't my trust reconciliation balance?

If you’ve been doing trust account reconciliations long enough, the chances are high that you will come across one that just doesn’t work. You think you’ve done everything right – the way you you’ve always done it – but this time lady luck isn’t on your side.

I’ve listed all the reasons your trust account might not balance. Work your way through this list and you’ll be balancing in no time at all.

Your account closing balance has been entered incorrectly.
A transaction that’s in your bank statement hasn’t been entered into your trust accounting software in the same month. You overlooked it and therefore it hasn’t been ticked as reconciled – or included in your Adjustments figure.
You accidentally ticked something as being reconciled in your software, but it isn’t showing in your bank statement for that month.
The total of your Adjustments figure has not been added up correctly.
You accidentally ticked something as being reconciled – but the amounts vary slightly. For example, transposed figures can be easily overlooked.
The previous month’s bank reconciliation didn’t balance.
Were any cheques cancelled? This can sometimes cause your reconciliation to be out.
The bank made an error. I’ve seen situations where cheques have been presented for different amounts than they were written out for. I’ve also seen bank statement running balances that were incorrect and also amounts added or subtracted after that day has already passed.
Software glitches. Very occasionally there can be hiccups with accounting software that results in errors that you won’t be able to fix yourself.

When trust account reconciliations go well, it can be really satisfying. You know that everything lines up nicely and you’re on top of any issues that have happened throughout the month. However when they go wrong, it’s easy to panic. You might not know where to start or what to do after you’ve checked all the obvious places to find those pesky out of balance amounts.

The list above should get you on the road to hassle-free trust account reconciliations in no time.

And if you decide that sorting out trust account reconciliations problems isn’t for you – you can always outsource to a professional.

Happy bookkeeping…

Sarina

About the author.

Sarina Abbott is the owner of Festival Bookkeeping. She’s a registered BAS Agent and Xero adviser who has previously worked in the legal and conveyancing industry, as well as for a registered training organisation. She lives in Adelaide, South Australia with her husband and 2 sons.

You can find out more about Festival Bookkeeping here

How to motivate yourself to do your bookkeeping (secrets from a bookkeeper)

Bookkeeping Adelaide How to motivate yourself

You lean over and turn off your computer after a full day of work. You feel relieved that another day is done. Your mind turns to what you’re going to have for tea and whether you’re going to need anything from the supermarket. Then out of the corner of your eye you spot a couple of receipts partly folded and starting to fade that are placed precariously on top of a pile of other papers. Sigh….you still haven’t done your bookkeeping. Another day has gone and you didn’t get around to it like you promised yourself you would. Again.

If you don’t run your own small business, this scenario might seem a little trivial. It’s just entering a few dates, names and numbers, right?

Well I’ve lost track of the number of small business owners that have confided in me how bad they feel about being behind in their bookkeeping and how much it’s affecting their personal life and business life.

This is what I hear a lot:

“My partner is getting frustrated with me because I don’t know my figures”
“My tax return is overdue and I’m sure I’m going to get a big fine that I can’t afford”
“I’m sure I will need to register for GST soon, but I don’t know what my income is. It’s really worrying me because I know I have to do something about it soon”
“My business coach keeps asking for my figures – but I don’t know them”

Now you would think I’m going to tell you that you should outsource to a bookkeeper or buy this new, beaut software. But that’s not what this post is about. This post is to genuinely share methods that small business owners can use themselves, in order to gain the motivation to get their bookkeeping done. These methods are what I use myself when motivation is low, or overwhelm is high. They are not expensive or difficult and I’m sure that if you use even a couple of these methods, you will get your bookkeeping done or at the very least make great progress.

1. Use a timer

This can be an online timer, your watch, or even try an old-school method. Set the timer for a short period of time – 40 minutes is fine. Commit to 40 minutes of bookkeeping only. Smash it out and feel great about the progress you just made. Maybe that’s enough – you’ve achieved what you set out to do. Turn off your computer and forget about it for today. Now maybe the time went quickly for you and you feel you’ve got another 40 minutes in you. You’re on a roll. Go off and step out into the sunshine for 5 minutes or make a cup of coffee to reward yourself. Go back to your computer, set the timer for another 40 minutes and smash out another 40 minutes of bookkeeping.

2. Work somewhere different

If you’ve got a laptop, move it out of the office to the dining room table. Or move it from the dining room table to the bedroom. Personally I would have difficulty working outside, but if that works for you, then go for it. Go to the library (I get phenominal amounts of work done when I work from the library – however it’s usually business development work and not accounting, as I don’t want to risk others accessing my accounting information because I’m using a public internet connection). Go to your parent’s house. Book a once-off day to work from a co-working space. Just change up where you’re working from, because sometimes just the thought of sitting down at that same spot that you’ve already spent hours at can be depressing.

3. Treat yourself

Buy snacks for yourself that you wouldn’t normally buy – specifically for bookkeeping. Treat yourself with something nice, so that sitting down to do your bookkeeping is a positive experience.

4. Do smaller amounts often

Now you might not realise that this is one of the reasons you put off your bookkeeping. But if you’re only logging into your software or opening up your spreadsheet every few months (or even longer), then you’re probably forgetting how to do a lot of it. Decision fatigue is a thing! If you have to keep stopping and deciding what to do next, or are trying to remember how you did something last time, then you’re wearing yourself out without even realising it. By doing it more regularly, everything will stay fresh in your mind.

5. Eat the ugliest frog first

This has been one of my most helpful business mantras since I discovered it about 5 years ago. If I’ve lost you here, check out Brian Tracy. I’m thinking bookkeeping might be your Ugliest Frog. So eat it first!! Practise a bit of tough love on yourself and do your bookkeeping before you do anything else that day. You can even try getting up 40 minutes earlier, for the sole purpose of getting bookkeeping done. The rest of the day will feel SO good for you that the decision to then get up and do the same thing the next day will be even easier. Your day will flow a lot better and you’ll become much more productive in general. You can use this concept for anything in your personal or business life.

6. Listen to music

Motivate yourself to do your bookkeeping with music

This seems a bit obvious, but how often do you actually make the effort to put on music while you work at your computer? Or if you are doing your bookkeeping first thing in the morning, have music on while you’re in the shower before you start. Similar to the special snacks you treat yourself with, you will start to look forward to doing your bookkeeping because you’ve made a fun ritual for yourself.

7. Start tracking your monthly income

This doesn’t need to be fancy. Start writing down your total sales each month. Each time you get another month’s bookkeeping done, record somewhere separately what that monthly sales were. Some months it may be less than the month before – that’s okay. You just motivated yourself to kick butt that bit more in the next 4 weeks. Some months it will be more than the month before – congratulations! Something you’re doing is working – the proof is in the numbers. It’s quite addictive once you start tracking your numbers – you will find yourself automatically motivated to get your bookkeeping done.

8. Just turn on the computer

In my early 30’s I used to run a lot. There’s a trick with runners to keep motivation up – they say just to “put on your sneakers”. It really works. Once those runners are on, it’s that much more easier to just step out the door and do your run. Do this trick with your computer. Get up and turn it on! Before you get dressed. Before you make your coffee. Before you check your phone. When I have a particularly overwhelming and large client job to do, this (oh so easy) tip works every time.

9. Positive mindset

I know it’s easy to get into the mindset that bookkeeping is boring. Bookkeeping is pointless. Bookkeeping is hard. Or thinking “numbers aren’t my thing”. Well I challenge that mindset. You’re not going to love everything in business – if it was easy, then everyone would be doing it and doing it successfully, right? Having a positive mindset helps in all areas of your business and personal life. You can choose to keep thinking bookkeeping is horrible – and continue to avoid doing it – and continue to beat yourself up over not doing it. Or you can choose to re-frame your thinking around it.

For example:

I can’t wait to get that 40 minutes of bookkeeping done, because then I’ll be on track to get my tax return done early this year. Gee that’s going to feel good.

I feel like my sales are up this month – I can’t wait to check my income spreadsheet to see if I hit $5,000 in sales finally.

Woo hoo – another month’s bookkeeping done. Time to hit the pub.

Okay – so these might seem a bit corny, but you see what I mean. Your bookkeeping is what you tell yourself it is. You get to choose your attitude.

Why would a bookkeeper share these tips?

I don’t mind sharing these tips with small business owners. There will always be business owners that don’t want to outsource their bookkeeping. There will always a point in time when it makes sense for a small business owner to do their own bookkeeping. When it’s time to outsource – it’s time to outsource. The cons of doing it yourself will outweigh the pros and you will (probably with relief I’m thinking) hand it over to a professional bookkeeper.

In the meantime, I just know there’s a tip or 2 above that you can implement straight away. My wish for you is that you no longer feel bad about being behind in your bookkeeping and get to experience that feeling of relief that comes with being up to date very soon!

Happy bookkeeping….

Sarina

About the author.
Sarina Abbott is the owner of Festival Bookkeeping. She’s a registered BAS Agent and Xero adviser who has previously worked in the legal and conveyancing industry, as well as for registered training organisations. She lives in Adelaide, South Australia with her husband, 2 sons, a dog and a rabbit.
You can find out more about Festival Bookkeeping here.

8 Tips for Successful CATS Trust Account Reconciliations

Tips Successful CATS Trust Account Reconciliations by Festival Bookkeeping Adelaide

I’ve been providing bookkeeping services to conveyancers now for several years, and have witnessed the transition from desktop software and paper forms to eConveyancing and cloud based practice management software. In fact I worked in the conveyancing and legal industry 20 years ago and the changes from then to now have been substantial.

Houses. Blog Post by Festival Bookkeeping Adelaide. Conveyancing trust accounts bookkeeping

In 2018, Deloitte made the prediction that by 2022 there would a big shift towards cloud based subscription practice management software (see graphic below). That is certainly proving to be true, with a little bit of extra help from COVID-19 to push this trend along as well.

CATS Trust Accounting Software

CATS is a “complete practice management system written by conveyancers for conveyancers”. It was initially created in 2005 by a conveyancer who used it as a tool to run his own firm. The name CATS is derived from Conveyancing and Trust Account System.

It’s one of the software programs I’ve seen make the move to going 100% cloud-based. Making life easier for conveyancers and their staff – and also much easier for bookkeepers, accountants and auditors.

Over the years I’ve picked up a few tricks and tips along the way and I’d like to share 8 tips for a successful CATS trust account reconciliation. You might be thinking that I’m doing myself out of clients by freely sharing my “tricks of the trade”, however I believe that if a business owner is ready to outsource their bookkeeping, they’ve already weighed up the pros and cons carefully and know that outsourcing is the best option for them.

So this is for the conveyancers and conveyancing staff that are still doing their CATS trust accounting and bookkeeping themselves.

8 Tips for Successful CATS Trust Account Reconciliations

Sort your list of transactions by amount before you start ticking off items. Especially helpful when you’re reconciling Payments, as this tends to be a longer list to scroll through than deposits.

Tick off bank statement amounts with a pencil or pen at the same time as you tick off the amount in CATS. This reduces the risk of losing your place and having to start from the beginning. It also makes it easier to go back and find what you’ve missed, in the event that you get to the end of your reconciliation and have a discrepancy. If you’re working off of a PDF copy of your bank statement, you can highlight the amounts instead of ticking.

Circle any items that are on your bank statement but that you can’t reconcile in CATS. For example, if the amount is missing altogether in CATS, or is for a different amount. Then you can come back at the end and easily work through your discrepancies.

You don’t have to reconcile a whole month in one go. There are several scenarios where reconciling a couple of days or a couple of weeks at a time is a good idea. For example, you may have a lot of transactions and attempting to do a whole month’s worth in one go can be overwhelming. You may be new to reconciling trust accounts, or new to CATS software. You might find that doing a smaller amount every couple of days suits you better or gives you greater peace of mind than knowing you have one big job to do at the end of the month.

If you have 1 figure in CATS that matches the total of 2 or more figures in your bank statement (or visa versa), then make a note of this next to the amount on your bank statement.

Keep thorough notes of any discrepances. If you find you have a lot of transactions that make up your “Adjustments” figure, consider using an Excel spreadsheet so that the total of your discrepancies is automatically added up and therefore leaves less room for error. At a minimum, I ensure I have the date, the amount and the payor or payee. Ideally I will know the file number as well and be able to note that (sometimes this isn’t possible, for example a deposit may be made into your trust account and you won’t know who it was received from or what it was for). I also go the extra step and make a note of what the issue is and, if I can, what date it was fixed.

When finished, check that the amounts on the first page of your Trust Account Reconciliation report do in fact match the totals of the other 3 pages of your report – the Trust Account Ledger Balances list, the Unpresented Cheques list and the Outstanding Deposits list. There have been rare instances of these amounts not matching up – so taking the extra time to check these amounts now can save you a whole lot of headaches and time later.

Save electronic copies of your reports in well-named folders that will be easily accessible come audit time and in the event that someone has to dig back through previous reports for information. Don’t forget to back-up these folders somewhere safe.

Should I get a bookkeeper to do my CATS trust account reconciliations?

After reading the above tips, you may be thinking that reconciling your own CATS trust account correctly is too difficult or too time consuming.

Man with clock. Blog post by Adelaide bookkeeper Festival Bookkeeping Tips for Successful CATS trust account reconciliation

The clients that have outsourced their trust account reconciliations to Festival Bookkeeping, have done so for some of the following reasons:

1. Errors

They’ve been picking up errors whilst doing their own trust accounting reconciliations, but don’t have the time to work through those errors and track down which files they relate to, or how the problem came about. Outsourcing to a bookkeeper who specialises in CATS trust account bookkeeping means a fresh set of eyes are looking over the figures – picking up problems early and being able to easily track down the information needed in order to fix the problems.

2. Growth

The conveyancing firm has grown to the point that doing the trust account reconciliations themselves is no longer viable. They’re losing time and money by continuing to do it themselves, when an experienced CATS trust account bookkeeper can step in and do it quickly and efficiently.

3. Deadline Management

Conveyancers often have other priorities – they need to get their settlements across the line for their clients and are often working to tight deadlines. Whenever another month goes past and the trust account reconciliation has been put on the “backburner” again, there’s a huge weight added onto their shoulders. Handing over their CATS trust account reconciliations to our firm has removed that weight. Their trust account is now on OUR calendar, and we help keep everything moving along, as it should, so that when audit time rolls around everything is ready to go.

These are some of the things you need to weigh-up when deciding whether to continue doing your trust account reconciliations yourself, or whether you should be outsourcing to a bookkeeper. As with any outsourcing, you should ensure the firm you’re outsourcing to has experience in your particular area of bookkeeping. Trust account bookkeeping is a specialised area, and not all bookkeepers have been exposed to the nuances and regulations of the conveyancing industry and trust accounting.

Happy bookkeeping….

Sarina

About the author

Sarina Abbott started her bookkeeping firm Festival Bookkeeping in 2015. She’s a registered BAS Agent, Xero adviser and self-confessed numbers nerd. She’s been sharing her bookkeeping tips via The Savvy Bookkeeping Blog since 2013. You can find out more about Festival Bookkeeping here:

https://www.festivalbookkeeping.com.au/home.html

Sarina Abbott BAS Agent and Xero adviser of Festival Bookkeeping Adelaide

Some more blog posts you might find helpful:

Cliniko – A Business Owner’s Perspective

Trying to choose the right software to use in your business can be difficult. Having the opportunity to see what other business owners who are already using that software think about it can be a huge help. So I was lucky enough to have Merel Purmer of The Art of Expression tell us a bit about her business and her own personal experiences with using Cliniko.

What services does your business The Art of Expression provide?

We provide counselling and art therapy services

Can you please tell me a bit about your business journey – where you started and where you are now?

I started my business in July 2014. I have slowly built my business. At first still working in a part time-job, then moving full-time in my own business and now I have 2 employees working with me.

How did you find out about Cliniko software?

I did extensive online research into the different practise management software systems. This helped me working out what exactly I wanted from a system and which one would than suit me best.

How long have you been using it?

I have been using Cliniko since January 2017

Did you try any other similar software prior to deciding on Cliniko?

No I haven’t tried anything else. I use the free trial period to find out it I liked it. Once everything is set up it does not make it easy to move to a different system. Having said that, I have not once thought about moving to a different system.

Did it take you long to learn how to use it? Did you teach yourself or did someone show you how to use it?

I taught myself how to use it. It did not take me very long to understand the main components of the Cliniko. It is very easy to navigate, I like the lay-out and all the features it has.

Cliniko has very good support. I can ask a question at any time and someone will help me out.

What is your favourite feature of Cliniko and why?

I like how from my booked client appointment I can easily add the notes for the session and create an invoice for that particular session, and Cliniko sends the invoices to Xero. The best thing is that I can give you Sarina, as my bookkeeper, access to Cliniko to create all my invoices!

I am now also using the ‘forms’ feature with my clients. I create my own customised form, for example my assessment form, and send this to my clients to fill out. Clients don’t need a laptop or any special software to fill out the form. They can access the form by following the link I send them, on their phone/tablet/computer.

Have you had any feedback from clients as to whether they like/don’t like it?

I have asked for feedback when I send of the first assessment forms and the feedback from clients is that it is easy to use. The only negative is that they have to fill out the form in one go as it does not safe anything you have entered previously.

I also use the online sessions, Telehealth, feature with clients. This has been absolutely fantastic during COVID. The connection is secure, encrypted from both ends, giving my clients the privacy and confidentiality they need. Clients have appreciated still being able to connect during COVID. Some clients still access the online sessions.

Do you use Cliniko in conjunction with any other software or apps?

Yes, I have my Xero account linked to Cliniko.

Is there anything you wish the software would do, that it doesn’t currently do?

I don’t think I am using all the features yet!

Finally, would you recommend Cliniko to other business owners in the same industry as you?

Absolutely!!

Hopefully this will help you in your business journey as you navigate your way through software selection.

Festival Bookkeeping specialise in assisting business owners with their Xero and Cliniko bookkeeping needs. You can find out more about us on our website: http://www.festivalbookkeeping.com.au/

Happy bookkeeping...

Sarina

Improve Cashflow with Flow Software

Business owner man cashflow Xero Flow Software

My favourite thing about Flow is that it doesn’t mess around. No need for studying accounting books or endlessly Googling how to read your financial reports.

It’s a daily cash management tool for small business. It pulls your hidden, critical information out of your accounting software and brings it right out into the light of day.

It’s great if you’re feeling overwhelm and just need the simple facts so you can get stuck in.

From the Futrli website, some of the ways Flow can help the small business owner:

Quickly identifies hidden poor payers
Calculates the right time to pay bills
Helps you understand how to make the right decisions to keep more of your cash in your account

An example of how Flow communicates with you:

FlowScreenshot2Snipped

And this:

FlowScreenshot1Snipped

Once you connect Flow to Xero they sync on average every 12 hours – giving you up to date information to work with. Because your software is integrated, as you’re scrolling through your posts in Flow, you can click on those posts and you’ll be taken over to Xero to look at the actual Invoices and Bills that Flow is referring to (with the Pro version).

I recommend pinning posts in Flow so that you can go straight to the information that’s important to you if you are short on time.

Soon Flow will also integrate with Slack and Gmail.

Getting on top of your debtors and creditors is one of the easiest ways to improve cashflow. I think we tend to just accept things how they are though and honestly we don’t realise how much of a difference working on these key areas of our business can help turn our business around. Whether it’s in a time of urgent need to stay afloat (like a lot of small businesses are experiencing right now) or during those times when our business is looking strong and we’re wanting to spend some money and take it up a level.

Flow is very easy on the budget and easy to use. There’s a free version with the basics and the Pro version with some nice extra features that are worth the small monthly subscription.

Happy bookkeeping…

Sarina

Interested in more great software that integrates with Xero? Try reading:

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

3 Easy Bookkeeping Tips for Tradies

Tradie working tradesperson

I get that bookkeeping can be a bit of a hassle or (dare I say it) boring for some small business owners. Your focus is on doing a great job for your clients and being able to pay your bills. So with that in mind I’ve chosen 3 of my favourite bookkeeping tips to make life that little bit easier for the tradies out there.

1. Separate personal banking from business banking

Many business owners start out by using their personal bank account for business purposes. And if you’re a sole trader the Australian Taxation Office doesn’t have a problem with this. However, I still advise people to separate the two as soon as possible. Why? Well firstly getting your paperwork ready for tax time will take longer if you don’t (and ideally you want the process of getting ready for tax time to be as streamlined and pain-free as possible). Secondly, it makes it much more difficult to know how much money you have personally pumped into the business to get it off the ground and to know how much you have taken out for personal expenses.

2. Keep all receipts

There may be some tax deductions you aren’t aware of – and no-one expects you to know them all. For example, if you’re outdoors a lot as part of running your business the cost of purchasing sunglasses and sunblock may be a tax deduction. If you’re not sure, keep your receipt anyway and run it past your accountant before tax time. Storing your receipts electronically is a great way to go as well. There are also some great apps that can help you with storing receipts and reducing data entry time – be sure to check out Hubdoc and Receipt Bank.

3. Invoice promptly

If you have time after completing a job can you invoice whilst there or straight after? Using mobile software is ideal because you can log in anytime, get your invoice prepared and emailed through then and there. Lack of cashflow is one of the main reasons small businesses don’t survive. So the faster and more regularly you can get that cash coming in, the more likely you are to have money to cover your bills when they become due (and the less reliant you will be on expensive loans and credit cards). Rather than let your invoicing build up into a big job that you dread doing, doing little bits more often means less stress and better cashflow. If you’re having trouble with clients paying you on time, I prepared this infographic: Top 6 Tips – Keeping on Top of Customer Payments

If you’re looking for easy to use accounting software, Xero is popular with tradies and you can try a free 30 day trial here. It works well with the above 2 mentioned receipt apps Receipt Bank and Hub Doc as well.

Happy bookkeeping…

Sarina