Frequently Asked Bookkeeping Questions

The BookSitters Car Bowral - Frequently Asked Bookkeeping Questions

Bookkeeping generally comes with a lot of question marks! To reduce some of the uncertainty around the bookkeeping space, we have provided below some of our most frequently asked bookkeeping questions. If you have a question that has not been addressed in the list below, send us a message! We’ll be happy to get in touch with an answer.

Happy reading!

Frequently Asked Bookkeeping Questions

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Can a bookkeeper do payroll?

We sure can! Our payroll services cover everything from setting up STP to superannuation. We regularly attend bookkeeping training to keep ourselves up to date on the latest industry updates (including the recent award changes) and pride ourselves on keeping clients compliant with ATO requirements and streamlining business processes.

If you are not yet signed up for Single Touch Payroll, the ATO due date has long passed! The first step is to have a chat with us. As a registered BAS agent, we’re in the best position to help you with this and can help you decide on the most cost-effective software for your needs.

 

Can bookkeeping be done remotely?

Absolutely! Today’s cloud accounting capabilities were designed to make life easy. Your bookkeeper can manage your books remotely, but you can also access your own real-time data, financial information and reports. You will always have access to the information you need to make business decisions on the go from anywhere, anytime, on any device. This is so valuable for all you busy entrepreneurs!

One of our personal favourite bookkeeping software apps is ReceiptBank which allows small business owners to capture a receipt by taking a photo with the app (or forward items to your ReceiptBank email address). The app will extract key information from the submitted document and can be published to your cloud accounting software for the bookkeeper to sort.

What does this mean? Basically, no more shoeboxes full of receipts! Say goodbye to pesky piles of paperwork you don’t understand and embrace a paperless business. We’re experts in multiple accounting software platforms and apps. We can help you choose, setup and train on the most suitable for your business.

 

How do I get started with basic bookkeeping?

If you’re just getting started with your business, bookkeeping might be completely new to you. Although we do highly encourage you to engage the services of a bookkeeper (at least to get started!) we do have a range of resources available on our website to help you if you’re stuck.

They include:

  • Xero Resources
  • MYOB Resources
  • Quickbooks Resources
  • Business Resources
  • Cloud Accounting
  • Blog

We also offer a FREE 7 Day Xero Course online to show you the basics and set it up to run efficiently for your business. Alternatively, you are more than welcome to reach out for a complimentary one-hour consultation to get you on the right track from day one.

 

How much do bookkeeping services cost?

Due to the varying complexities of businesses and their requirements, it is impossible to put a definitive number on the overall cost of bookkeeping services. For example, a sole trader’s bookkeeping needs will differ greatly from a retailer that pays staff!

We offer a complimentary one-hour consultation to discuss your business needs and identify ways we can help you to grow your business. Once we have a strong understanding of your business and expectations, we can discuss a package that suits.

In the meantime, our packages page highlights some of the most popular bookkeeping packages available depending on software and business size.

 

How will a bookkeeper help my business?

Create time for your business

It’s amazing how many clients first came to us as time poor individuals! During our initial consultations and enquiries, we often hear “I just do not have enough hours in the day” or “accounts is just not my thing”. We love what you don’t! Give us the paint and we will bring the brushes! Creating more flexibility for you inside and outside of your business is one of the many things that drives us.

Keep you compliant

As a small business owner, you’ve got enough to worry about without having to stay up to date with all the legislative compliance changes. That’s exactly how your bookkeeper can help; it’s our job to know about industry updates and compliance changes so you don’t have to. We bookkeepers stay aware of changing laws, so we can ensure your company is compliant with payroll and tax laws, as well as any other financial rules and regulations that affect your business.

Teach you about your business numbers

A great bookkeeper is someone who doesn’t mind sitting down with you and running through the “ins and outs” of all things bookkeeping. They will take the time to explain your business numbers, show you the insights behind them, provide suggestions, tips of the trade and answer your questions without any accounting jargon.

bookkeeper also keeps track of your company’s financial health and advises you on decisions that can help you grow your business. They can also warn you if you’re about to make a decision that could hinder your longer-term growth.

In addition, bookkeeping services usually include support for you to ask questions around payroll, software or general bookkeeping (for example, common questions we are asked is, “What is double entry bookkeeping?” and “Why is my net profit not in my bank account?” – we have answered these for you below.

Bringing a professional on board can seem pricey for a small business owner, but a bookkeeper’s expertise could mean considerable long-term benefits for your company. We can grant you with peace of mind and added time to get back to running and growing your business.

 

What are some common mistakes in new business software setup?

We absolutely love setting up fresh books from scratch! Squeaky clean, all ready for you to use so that you can set off on the right path to fly with your new business!

Why do we love it so much? We find this to be far more cost-effective for business owners in terms of getting set up correctly from day one. This is because it minimises the risk of time and money spent fixing mistakes later. Some of the most common mistakes we see include:

  • Accounts Payable – accounting for supplier payments twice / not clearing against payments
  • Accounts Receivable – under-invoicing by GST portion, applying incorrect payments
  • Accounts – incorrect opening balances, not linking bank accounts correctly
  • Bank Reconciling – not reconciling or force reconciling
  • Business Setup – not accounting for cash setup expenses or loans
  • Loans – incorrectly splitting repayments
  • Chart of Accounts – incorrect tax codes, linking to incorrect account types
  • Payroll – lack of documentation for payroll setup, accruals not calculating correctly for leave, opening balances not entered or awards not being researched

 

What are the main duties of a bookkeeper?

What do bookkeepers do on a day-to-day basis? The answer is most likely “more than you might think!” The BookSitters handle all aspects of bookkeeping and more, including:

  • Setting up or streamlining current systems
  • Recommending and setting up bookkeeping software
  • Data entry (NOTE: it is impossible to complete data entry without also being involved in determining tax codes and therefore the allocation of GST which requires tax invoice documentation)
  • Expense Tracking
  • Invoicing & Receipt Management
  • Transactional Checks & Bank Reconciliations
  • Accounts Payable & Receivable
  • Online Banking
  • Calculating GST
  • Cashflow Management
  • Budgeting
  • Compliance & Reporting
  • Payroll, Awards and Superannuation changes
  • BAS Agent Services (IAS, BAS Preparation & Lodgement)
  • Taxable Supplier Payments (TPAR)
  • EOFY Processing
  • Management Reports
  • General Business Administrative Support
  • Business Planning
  • Profit & Loss Reporting
  • Keeping educated on the industry, compliance, best practice bookkeeping and any changes that may affect clients
  • Keeping up to date with legislative requirements (so you don’t have to!)

Bookkeepers can also provide clients with insights on business opportunities and potential financial issues that they may not have been able to see. Most often the bookkeeper will be happy to sit down with clients and explain their numbers (without the financial jargon) while delivering accurate and timely bookkeeping services.

For us at The BookSitters, it’s about so much more than bookkeeping and we always strive to go above and beyond for our clients.

 

What is a Registered BAS Agent?

A BAS Agent (or Business Activity Statement Agent) is authorised to prepare and lodge BAS returns on your behalf and provide advice on BAS-related items, such as your day-to-day business taxes (GST and PAYG). Any bookkeeper who wishes to provide a BAS service for a fee (for example BAS preparation/lodgement), code expenses and provide bookkeeping services where decisions are made in relation to GST, must be registered as a BAS Agent.

This has been in place since 1st March 2010 and is a fantastic system because it provides protection to businesses and individuals who don’t have a strong understanding of BAS processes and are seeking the services of a bookkeeper. A BAS Agent must renew their registration annually which includes satisfying certain criteria, such as being a ‘Fit and Proper Person’, being up to date with personal tax returns, completing the necessary number of hours of recognised training, and having the appropriate Professional Insurance Policy in place.

As a registered BAS Agent, we are more than happy to provide our registration numbers for verification to our clients, potential clients or our client’s accountant.

 

What is bookkeeping?

Put simply, bookkeeping is “the process of recording, analysing and interpreting the financial transactions of a business or individual.” The BookSitters aims to go further than this to partner with and educate our clients on their business, systems, operations and results.

A good bookkeeper can be a huge asset to your business as they have the knowledge, experience and passion to manage your records accurately. Most importantly, they provide you with an important insight into your business’ operations and profitability.

 

What is double entry bookkeeping?

The double entry bookkeeping principle means that every financial transaction will involve at least two accounts. This method gets its name because you enter all transactions twice.

In double entry bookkeeping, a transaction always affects at least two accounts, always includes at least one debit and one credit, and always requires that total debits and total credits be equal. This is to keep the accounting equation (assets = liabilities + equity) in balance.

Because transactions are entered twice, double entry bookkeeping is a practice that helps to minimize errors and increases the chances that your books balance.

 

What is the best bookkeeping software?

As Gold Partners, we love Xero! However, we do also work with other software such as MYOB and Quickbooks Online, because we know that your software of choice should be based upon your business situation and requirements.

We offer a one-hour complimentary consultation for just this reason – so we can gain an understanding of your business and recommend the bookkeeping software we believe is best suited to your business, whether it be Xero, MYOB, Quickbooks or others.

 

What is the difference between a Profit & Loss (P&L) and balance sheet?

The profit and loss reports:

Income – Direct Costs = Gross Profit – Expenses = Net Profit

The Balance Sheet reports:

Assets – Liabilities = Equity

The Net Profit does not equal the cash in the bank that a business has. There are many items that a business will pay for in cash that are not included on the profit and loss, such as the repayment of loans.

EXAMPLE: A car loan repayment of $990 of per month deducted from your bank account. The amount when recorded will be split into a loan principle amount and an interest amount. The interest component will be re-coded as an expense on the Profit & Loss (reducing net profit), and the loan principle amount will reduce the liability (loan) on the balance sheet, increasing equity. The entire monthly repayment, however, will be deducted from the business’ bank account.

Confused? Give us a call!

 

What is the difference between accounting and bookkeeping?

Bookkeeping and accounting are often assumed to be the same profession. This is not the case!

Both are extremely important for every business, especially when used together. While bookkeeping is responsible for the recording of financial transactions, accounting is responsible for interpreting and analysing the financial data.

A bookkeeper will be the person who assists you with the ongoing financial recording, transactions, compliance and lodgements that keep your business running smoothly. Your accountant will be the person who analyses the data produced by your bookkeeper to minimise your taxation and make recommendations. Accountants have a strong understanding of tax law & requirements and will be best to assist in this area.

Instead of perceiving a “bookkeeper vs accountant” situation, it is important to understand that your accountant and bookkeeper work best together to serve the financial requirements of your business. At The BookSitters, we focus on working closely with our clients chosen accountant.

 

Where are your bookkeepers located?

Whether you’re just after some bookkeeping tips, basic bookkeeping services or a software package such as MYOBXero, Quickbooks Online or Receipt Bank, we can help. Your business will be better for it, and so will you.

See below for our bookkeeper locations; if we haven’t answered your questions, please feel free to use the contact form below!

Our Bookkeepers

Justine Turner Day: Southern Highlands / Bowral Bookkeeper
Petra Austing: Southern Highlands / Bowral Bookkeeper
Karin Evans: Gold Coast Bookkeeper
Amanda Graham: Gold Coast Bookkeeper
Pru Hall: Wollongong Bookkeeper
Jackie Short: Canberra Bookkeeper

 

Why do I need a bookkeeper for my small business?

Being a small business owner can be an incredibly awarding experience. However, running your business can be stressful enough without trying to understand and maintain your books! It is generally an area that small business owners don’t like, but must be responsible for.

One of our key roles as bookkeepers is to take the stress and pressure away from small business bookkeeping, allowing individuals to spend more time on what they are passionate about: their business!

But having a bookkeeper is about more than just saving time. A good bookkeeper is like having a built-in business coach, someone you can build a relationship with. They will take care of all the “boring” stuff while educating you on the picture behind your numbers so you can make better informed business decisions. Bookkeepers can help you to understand the ongoing costs of running your business, what your cash flow situation looks like and if you are really making a profit.

Every small business needs a bookkeeper; a mentor, business partner and cheerleader, encouraging you to succeed in your business and applauding you as you do so!

 

We hope we have been able to reduce some of the “question marks” around bookkeeping! If our Frequently Asked Bookkeeping Questions did not address your specific question, please feel free to fill in the form below and we will be happy to answer for you.