Why you need to get Accounting Software
Tax season will soon be on our doorstep and as a small business owner, you are probably dreading the throught of preparing your taxes. Preparing a tax return isn’t as simple as filling out a form. A startling number of small business owners try to take care of their own taxes in order to save money. Unless you’re also an accountant, preparing your own taxes may cost you more in the long run, and puts you a risk of inadvertently doing something illegal.
Keep business and personal finances separate!
One of the biggest mistakes people make is that they don’t separate their business and personal bank accounts. We recommend to open a separate business bank account and separate business credit card. Whether you’re a sole trader or a company, every time you purchase anything for the business, use the business account or credit card. That way you can always go back to your statements to track expenses. Personal expenses can get intertwined and deductions can be missed or worse, claimed when they aren’t a legitimate deduction.
Use accounting software to streamline bookkeeping!
Automating your bookkeeping as much as possible with accounting software makes tax season much simpler and gives you more time to focus on the enjoyable aspects of your business.
Excel is a great, cheap and easy solution when you’re just starting out, but as soon as you need to manage several customers’ outstanding invoices, register for GST or you’re looking to hire staff – this is a good indication you need accounting software.
Doing hours of data entry are officially over. Your bank account and credit card can be linked to the software allowing your bank transactions to flow through to your accounting software where they can be easily allocated by the push of a button. It keeps track of GST and quickly and easily produces your Business Activity Statement.
Accounting software is specifically designed to produce a variety of different reports to help you run and manage your business. A Profit and Loss report shows you what your income and expenses are for a selected period and whether or not you are actually profitable or running at a loss.
It makes sure you’re paying staff the right amount. Payroll is much bigger than just paying someone every week. Using a software package can help you ensure that you are paying the correct amount to your employee, taking out the correct amount of tax by always having up to date tax tables, paying the right amount of superannuation and with the introduction of Single Touch Payroll, cloud based software packages are now linked to the ATO so you keep up to date with your reporting obligations.
There are plenty of accounting programs to choose from. We highly recommed a cloud based accounting software like Xero or Quickbooks, because you can invite your accountant to have access. Which makes it easier come tax time to have your return prepared – no more dropping off boxes of information to your accountant!
We offer a broad range of small business services including bookkeeping, BAS preparation and tax returns. Feel free to contact us for more information.