Running your own start-up is easily one of the most difficult tasks you can undertake. When it’s just you and a small circle of trusted associates, everything falls on your shoulders. This includes the bookkeeping for your new business. The problem is most entrepreneurs don’t grasp the many requirements of balancing the books and keeping records when it comes to your tax reporting obligations.
But worry not! Help is right around the corner. As financial experts, Evergent has all the information you need, plus hints on how to take care of your bookkeeping in an easier way. Interested in learning how your start-up can save time and money when it comes to financial record-keeping? We’ve got you covered.
Understanding Accounting Basics
You’d be surprised at how many start-ups have the same kind of bookkeeping system. It’s not exactly complex, as it involves a shoebox stuffed with sales slips and receipts. It’s also not exactly helpful either! No, the standard accounting system, known as double-entry accounting, is what every business should be using, and it’s been one that’s been in use since the end of the 15th century.
Double-entry accounting is deceptively simple. One side of the book has a balance sheet, the other a profit and loss sheet. There are only two types of numbers Debits and Credits; On the balance sheet money coming in (debit) and money going out (credit); and for the Profit and Loss it’s the opposite. Recording all your business transactions in this manner lets you literally “balance the books”, and that’s really it.
21st Century Accounting
Today, of course, we don’t need to use massive ledgers filled with black and red ink. Thanks to modern technology, we can use software systems to record the incomes and outgoings of our business. One of the most popular of these systems is Xero, an easily scalable cloud-based system that lets you access your books anywhere you’ve got an internet connection.
Xero is brilliant but it still requires you to hand-feed your invoices and receipts into directly. That’s why we love a service like Receipt Bank, an invoice capturing software that lets you import your invoices so that you never have to get bogged down with tedious data entry every again, as everything gets filed for you. For start-ups where you’re already busy doing hundreds of other things at once, these modern accounting tools will take your business to the next level.
Other Bookkeeping Requirements
There are regulatory reasons for you to keep good bookkeeping records, as well. For example, your startup, like many other businesses in Australia, find it necessary to register for goods and services tax, or GST (a requirement if you have more than $75,000 in revenue). Lucky for you, both Xero and Receipt Bank were built around GST requirements. Once Set up correctly, you can sit back and review the transactions against the invoices and receipts cutting your bookkeeping time by 90%.
When it comes to lodge your Business Activity Statements (BAS) every quarter or every month, Xero can do it for you instead of having to do so manually by going through the Australian Taxation Office’s MyGov business portal. Accurate GST reporting is obviously important, but let’s not forget that, as an employer, you also need to report Pay As You Go Withholding (PAYGW) and Pay As You Go Instalments (PAYGI). You can use an ATO calculator to suss out your requirements there. Or you can simply turn to Xero and it can pull all the relevant data for you and calculate and lodge it on the spot.
The Learning Curve
However, you can’t unlock the potential of systems like Xero if you haven’t learned how to work all these systems correctly! There’s going to be a learning curve, and you need to gain an understanding of how to set up, configure, and then use applications like Xero and Receipt Bank systems correctly so that they can work as intended. If you don’t devote the time and resources to doing so, trying to use these systems is just going to complicate a situation that’s already complex enough as it is!
This is a real challenge for start-ups. Whoever does your bookkeeping is likely already doing dozens of other things as well, which makes it all too easy for something to fall through the cracks. Meanwhile, your start-up’s budget likely won’t stretch for a full-time accountant, leaving you with a real mess on your hands.
You can certainly teach yourself the ins and outs of a system like Xero or Receipt Bank. With enough trial and error you’re sure to figure it out. Yet with all the tax requirements such as GST and BAS, making an error on these submissions to the ATO can lead to some rather uncomfortable financial situations that you’d really not rather face alone. What’s a small business owner to do in such a situation? If only there was someone to turn to for help!
Why You Need Evergent In Your Corner
We know what it’s like to run a small business. You face unique challenges every day, and the last thing you need to deal with are complex financial matters that you don’t have the time and resources to devote to, nor the specialised knowledge to understand properly. That’s why here at Evergent, we offer that most unique of financial services: bespoke bookkeeping and accountancy services that you can not only rely upon but that won’t break the bank, either.
Unlike an accountant that you see once a year, you’ll have access to Evergent financial experts round the clock, available when you need to have a question answered. Our innovative monthly service model, combined with the use of accountancy and bookkeeping software like Xero, will help you navigate the worlds of GST and business reporting successfully, and all at an affordable price!
Contact Evergent today for a code to save 50 percent on your start-up’s Xero subscription! Remember – Do your own books right!