Introduction To Small Business Bookkeeping
You’ve started your own business. You have a plan for running it and know how many units you have to sell to Break Even. Bookkeeping and Accounting are not easy tasks. Most business owners have some knowledge and can be shown how to do the basics but they miss a lot.
What does bookkeeping do for small businesses?
Bookkeeping allocates transactions to the General Ledger.
What is bookkeeping?
Bookkeeping is the process of recording and classifying the business’s financial transactions. It’s done in a systematic and ongoing way. Bookkeeping maintains the records of a business according to set standards.
The objective is to produce reports which enable the business owner to make informed decisions. Double Entry Bookkeeping involves a debit and a credit. These entries change the financial status of a business. Bookkeepers advise clients on compliance issues and they implement systems. Systems make the bookkeeping process easier. Systems save time because they require less meticulous daily recording of transactions.
How does it work?
Entering transactions and events of the business is the first step. Bank statements are the lifeblood of any set of documents as they are proof of receipt or payment.
Double Entry Bookkeeping – what is that?
Determine what is a transaction. A purchase receipt, a sales invoice, and a lease are all transactions. Before computers, bookkeepers would use 32 column Cash Books. Bookkeepers now use computers and accounting systems.
Every transaction has some sort of effect on the business.
The bookkeeping process begins by ensuring transactions are first identified then correctly recorded.
Every day sales and purchases are made by the business. All transactions must be allocated to the correct account in the General Ledger. A bookkeeper knows how to do this correctly. She knows how to examine reports and make adjustments at the end of the period.
Cash is used to pay for and buy some items in the business. Authorities such as the Australian Taxation Office conduct audits on businesses. A bookkeeper ensures all records are in order including cash transactions.
The tier of bookkeeping professionals is as follows:
1. Unqualified bookkeeper
2. Qualified bookkeeper (Cert IV in Bookkeeping, TAFE level)
3. BAS Agent (Certified by the Australian Taxation Board, ATB)
4. BAS Agent who is also a member of a professional organization
5. BAS Agent who is also an accountant (a TAFE accounting qualification)
6. Degree qualified accountant
7. Degree qualified accountant who is also a BAS Agent
8. Degree qualified accountant who is also a Tax Agent
Professional Bookkeeping Associations include:
Australian Accounting Technicians AAT
Institute Certified Bookkeepers ICB
Australian Bookkeeping Network ABN
Professional Accounting Organisations include:
A bookkeeper who doesn’t make End of Period adjustments is a Bookkeeper to Trial Balance, the least qualified bookkeeper
A BAS Agent is a more experienced bookkeeper.
Many qualified accountants also work as Bookkeepers. Degree Qualified Accountants are not always Tax Agents.
Some Accountants are Tax Agents. They are able to lodge Tax Returns.
Some Accountants are Management Accountants who work with Tax Agents in a Joint Venture or Partnership. Other Accountants are Tax Agents who employ junior accountants and train them whilst they do further training.
RE Business Services is a BAS Agent, Degree Qualified Accountant and a member of the NTAA. RE is a Joint Venture with Monika Shaw who is a Degree Qualified Accountant, Tax Agent and a member of the NTAA. We specialize in:
1. Bookkeeping and sorting out bookkeeping-based problems
2. Lodging BAS’s
3, Lodging Tax Returns
4. Business and Tax Advice
Contact Dianne at Rapid Entry (RE) Business Services for Business Advice and accounting services. We service the whole of Brisbane and Interstate businesses as well, as we work remotely. firstname.lastname@example.org
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