Time to Reconcile: Importance of Bank Reconciliation and How a Bookkeeper Can Help

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Are you reconciling your bank accounts once per year? This may get you ready for tax time, but annual bank reconciliation is just the beginning. In order to grow your business at a responsible rate, you need to get a clear picture of your cash flow, understand the types of fees you’re paying, and catch fraud before it goes too far to fix. 

When you’re doing catch-up bookkeeping instead of regularly reconciling your books, you may think you’re in better shape than you are. Imagine hiring a new full-time staff member only to learn you can’t afford them? Learn more about the importance of regular bank reconciliation and when to call in a bookkeeper. 

What is bank reconciliation?

Reconciling your bank records means comparing what the bank has on record with your own internal reports. If you have a bank feed with an accounting service, you still need to reconcile your bank feed with your official bank statement. 

A lot of transactions are included in a reconciliation. According to The Institute of Certified Bookkeepers in Australia, you should periodically reconcile your internal records against the records of:

  • Banks 
  • Credit Cards
  • Barter Cards
  • Bank Loans
  • Petty Cash
  • Cash Drawer
  • PayPal

Why do you need to reconcile your bank accounts?

Your accounting records are only as useful as they are accurate. Sounds obvious, right? You’d be surprised how much missed bank fees and other small discrepancies add up and how many business owners may wave them off as unimportant. In reality, bank reconciliation can save you thousands of dollars per year. Combined with double-entry bookkeeping, which creates two records of every transaction, regular reconciliation keeps your books tidy. 

Here are some of the reasons reconciling your bank statements is so important. 

A bookkeeper looks over a bank reconciliation statement.

Catching Discrepancies

Your internal ledger says you spent $10,000 last month, but your bank statement says you paid fees totalling $500. This difference may seem small in the grand scheme of things, but if you make the same mistake each month — you’ll be off by $6,000 by the end of the year! Discrepancies can result from honest human error or fraud. If someone is skimming money from one of your accounts, you’ll notice it faster with a monthly reconciliation process. 

Tracking Cash Flow

Reconciling accounts each month gives an accurate picture of the amount of cash flowing in and out of your accounts. You’ll see if you’re actually in the black — or just thought you were. You can also reconcile your credit card receivables as a part of this process to make sure that everything has cleared that was supposed to. 

Managing Accounts Receivable 

One major source of reconciliation discrepancies is a cheque that did not clear because the account had insufficient funds. Checking your accounts receivable as a matter of routine allows you to catch these problems so you can either rebill the vendor or customer or write off the discrepancy as a bad debt. 

Making Sure Payable Transactions Have Posted

Comparing your statement balance to your internal records often also lets you confirm that important transactions have posted to your account. It would be a shame to forget that you still have an outstanding cheque out in the world — you could easily overspend on an account when it finally posts. 

Finding Systemic Issues

If you notice a pattern of individual errors or discrepancies, you may also catch a structural issue within your accounting system. Perhaps you need to change payment services or use a different bookkeeper if the same issues arise time and again. 

How often should I reconcile my bank statements?

The Australian government only recommends that you reconcile accounts “regularly,” which is a bit vague. Ideally, you should reconcile your accounts each time you receive a bank statement. If your accounts bill on different schedules, an end-of-month reconciliation is a good habit to get into. 

How can a bookkeeping service help with bank reconciliation?

An outsourced bookkeeping service can provide reporting and insights that your current staff aren’t able to keep up with. Partners like Visory provide an outside set of eyes to give your company an objective view of your financial affairs while saving you time and internal resources. Your team gets to use the insights and reporting to make smart decisions without having to do any of the work to create them. We call an outsourced bookkeeping service a win-win. 

7 of the Most Common Bookkeeping Mistakes

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You’re motivated, savvy, on the move… and incredibly time-starved. Between growing your client base and seeking new investors, it’s common for day-to-day tasks to fall to the wayside. Just don’t let bookkeeping be one of them. Small bookkeeping errors add up to a major landslide. A few missed financial transactions here and there can throw off entire financial reports, or even lead to tax implications. Here are seven common bookkeeping mistakes you can avoid with the right bookkeeping help. 

7 of the most common bookkeeping mistakes and how to avoid them

Businesses of all sizes experience bookkeeping errors. From undocumented expenses to unfiled taxes, accounting mistakes come in all shapes and sizes. You could face not only unexpected losses, but government penalties if you fall into one of these seven avoidable traps. 

1. Mixing business and personal

The best financial practice for any business — even a small- or medium-size organisation — is to separate personal and business transactions. When you’re trying to calculate tax deductions and reconcile your end-of-year reports later on, blended finances are a headache. You will have less to untangle later if you use a designated business account now. 

2. Using accounting software incorrectly

Popular accounting software programs can do a lot of heavy lifting. But they are still subject to human error. In other words: You can’t skip taking the tutorial. Do an annual check-in with your accounting software and ask yourself: Am I using the most up-to-date version of this software? Can this software handle the scale of my bookkeeping needs? Is this software updated with the latest tax rates?

3. Falling behind in bookkeeping

Another of the most common bookkeeping mistakes is simply falling behind. Even a month of missed reports stops you from accurately understanding your cash flow and current debts. Keeping a daily general ledger the right way means staying on top of every single transaction that comes in and out of your accounts. 

4. Tossing your records too early

Did you know the government requires your business to keep certain financial records for a set period of time? It turns out you can’t just send everything to the shredder when tax time is over for the year. In Australia, you should keep written evidence of your financial reports for five years after you lodge your tax return. In New Zealand, financial records should be kept on hand for seven years after you lodge the year’s taxes. This includes everything from invoices and receipts to wage books and vehicle log books. 

5. Incorrectly paying employees

If you have a full-time employee classified as a casual worker, the mistake could cost you thousands. You may be held responsible for back wages plus interest, and face legal penalties. What might seem like a small formality is in fact a major decision. Familiarise yourself with employee classification in Australia and New Zealand to avoid this costly mistake.  

6. Inaccurately reporting payroll and sales tax

A major part of keeping accurate business finances is paying the proper tax rate. Since payroll taxes vary across states and territories, you may need some help sorting out how to set up your payroll system the right way. In this case, it is always better to triple check than risk a hefty penalty at the end of the year. 

You must also make sure your point-of-sale systems are set up with the right sales tax (10% in most cases in Australia and 15% for most goods and services in New Zealand). Rest assured, if you don’t pay enough in taxes now, you will end up paying for it later. 

7. Hiring an inexperienced bookkeeper

Many of the above errors trace back to one common misstep: hiring a bookkeeper who is not able to keep up with your evolving bookkeeping needs. Someone with more experience can manage financial reports, prepare an accurate balance sheet, and stay on top of tax requirements. If you keep running into inaccuracies, it may be time to enlist a more robust bookkeeping team to round out your back office and keep things in line. 

If you’re a growing business in need of additional help, enlisting an outsource bookkeeping service may be the answer. Visory can help your organisation avoid these mistakes. You will be connected with a team of experts who know your industry inside and out, and you will have 24/7 access to your financial reports. Contact Visory today to learn more about our suite of account services that support your back office and help you avoid common bookkeeping errors.

5 Reasons Why Your Startup Should Use an Outsourced Bookkeeping Service

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You’ve been doing your own books since you opened your business. And you’ve been doing a stand-up job, if you do say so yourself. But this strategy can’t last forever. You’re probably starting to realise that you don’t have the time required to look after your bookkeeping by yourself as your business grows. Not only do you want to be ready for tax season, but you want your books to be in the best shape possible to help with cashflow management and strategic planning. 

The bottom line is your startup needs bookkeeping help once it gets off the ground. If you’re not ready to hire someone full-time, you have two main options. You can hire someone in-house on a part-time basis or use an outsourced bookkeeping service. An outsourced professional gives you full-time access to financial help without having to pay a full-time salary. 

5 Reasons to Use an Outsourced Bookkeeping Service

1. Outsourced bookkeeping helps you optimise your resources

Keeping a general ledger, learning to manage payroll, and preparing financial reports are all time-consuming. These tasks will eventually require a tremendous amount of precious resources (and the people doing them are usually handling other essential business tasks as well). Once you have more than five employees, experience accelerated growth, and/or decide to add extra products, staff, or services—it often makes sense to enlist some bookkeeping expertise. 

An outsourced bookkeeping service can help free up time in your organisation. And more time means more focus on activities that can help you grow, such as marketing, business development, and other essential growth-related activities. 

2. Outsourcing your books makes scaling more realistic

As you grow, deciding to outsource bookkeeping and accounting can help you take on new financial challenges or accounting practices. If you need to hire more full-time staff, for instance, having more bookkeeping help on call means you won’t miss a payroll period. You can also take on additional reports regarding your financial health. These reports, in turn, help you identify areas of potential growth and scale upward at the most advantageous rate. An outsourced expert can also implement double-entry bookkeeping or more complex reporting styles that are required for large companies. 

A startup business has a meeting to discuss finances..

Photo by Cherrydeck

3. Outsourcing your bookkeeping puts you in touch with experts

You know your vision for your business, you know your product or service, and you can recite your elevator pitch on demand. What you may not know is how to implement best practices for bookkeeping in your industry. Many startups are filling a niche category in the market, making your finances all the more unique. A qualified outsourced bookkeeping service does the vetting for you, so you don’t have to worry about enlisting the wrong person. 

An outsourced bookkeeping service can connect you with a financial expert who knows the best way to scale up in your industry, and which government reports you need to lodge at the end of the year. They can create a bookkeeping system that meets all your needs. 

4. Outside help with accounting helps to keep you tax compliant

Small businesses and large businesses have differing tax reporting requirements, depending on their annual income and structure. And it can be difficult to get it right. Some taxes are administered by the Australian Taxation Office or New Zealand’s Department of Inland Revenue, while others depend on the state where you operate. An outsourced bookkeeping expert will best know what reports you are required to lodge and when the deadlines are. 

5. Outsourced bookkeeping services get you ready for investors

Before an outside investor takes a chance on becoming a stakeholder, they will want to see detailed financial information. Everything from your current debts to your cash flow can help investors make an informed decision. Outsourced bookkeepers ensure your books are up to par and can take care of the reporting and insights needed to be investor ready. 

Many startups fail within the first five years of operation. If you want to make it, accurate bookkeeping is an essential undertaking. An outsourced bookkeeping service helps you connect with an industry expert, scale responsibly, remain tax compliant, and more. At Visory, we handle accounting needs for businesses that are growing from a small business to a more thriving enterprise. You will have full access to statements and reports around the clock. You can even choose a dedicated bookkeeper who will become a trusted member of your team. In short, Visory is your secret weapon to business growth. 

Bookkeeping Basics: The types of bookkeeping accounts every business owner should know

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As a business owner, you’re the top expert on your company’s products and services. An expert on controlling a balance sheet? Umm… not so much. Yet, knowing the back office like the back of your hand is essential to running a thriving organisation. Understanding types of bookkeeping accounts and tax timetables help you better plan for business growth. 

Is the language of the back office a bit daunting? Don’t be scared off. Learn the basics of bookkeeping terms and various methods of accounting. Once you better understand your accounting practices, you can become an expert on your business’s financial health.  

Basics of bookkeeping

Even creative executives should know basic practices. Budgets for social media, marketing, and advertising will be informed by available funds, after all! You’ll hear these fundamental buzzwords in any bookkeeping meeting worth its salt. Here is what they mean. 

  • Accounts payable – Your accounts payable includes any amounts owed to a supplier or other business. If you have received a good or service but not yet paid for it, your supplier’s invoice goes into your accounts payable. 
  • Accounts receivable – These are invoices that reflect money owed to your business. In short: unpaid bills from customers or clients. 
  • Assets – Assets include a combination of your accounts receivable, property and equipment owned by your company, product inventory, and liquid funds. 
  • Liabilities – Your liabilities combine accounts payable with other debts like bank loans, outstanding payroll, and credit card balances. 
  • Revenue – This term relates specifically to the money your company makes from its goods and services. 
  • Expenses – Your expenses are more than what it costs to run your business and sell your goods and services. This factors in everything from utilities and cleaning costs to salaries and insurance. 

Photo by Mikhail Nilov from Pexels

Types of bookkeeping accounts

There are various types of bookkeeping accounts and ways to calculate your taxable revenue. The way you record transactions and manage debits and credits often varies depending on your organisation’s annual income and the complexity of your expenses. Here are the most common types of accounting any executive needs to be familiar with. 

  • Cash basis accounting – Under this accounting scheme, you only record a transaction when the cash actually trades hands. Cash basis accounting is ideal for small businesses. 
  • Accrual basis accounting – When your business uses accrual basis accounting, you record a transaction when the service is complete — even if you haven’t been paid yet. 
  • Single-entry bookkeeping – In single-entry bookkeeping, you only record each transaction once. For instance, if you make a sale of $100, you only record it as revenue of $100 when using the single-entry system. 
  • Double-entry bookkeeping – When you implement a double-entry bookkeeping system, each transaction is recorded twice. For instance, when you make a sale of $100, you note it once as $100 revenue and once as $100 in lost inventory. Double-entry bookkeeping balances your credits and debits. 

Other bookkeeping terms you need to know

  • Cash flow – Cash basis accounting is the best way to track cash flow accurately, but any accounting scheme must track how much cash is coming in and out of your business. 
  • Cost of goods sold (COGS) – This term relates to the total cost of producing your products, including materials, labour, and other overheads. 
  • Owners’ equity – If you calculate total assets and subtract the total liabilities, you can calculate the value of your ownership. 
  • Balance sheet – A balance sheet lists assets, liabilities, and owner’s equity. It provides a snapshot of your financial health at any time and a look at your net assets.  
  • Manual bookkeeping – Manual bookkeeping are records kept in paper form. The Australian Taxation Office recommends keeping your records for five years. 
  • Cloud bookkeeping – Electronic records are usually produced using bookkeeping software. You’ll also want to keep these records for at least five years. 

Running your business can often remove you from the day-to-day accounting processes of your organisation. But knowing your way around a balance sheet helps you track growth and know when it’s time to scale. When you enlist Visory as a bookkeeping service, you have access to a trusted team of bookkeepers who will do the heavy lifting of record keeping. If you don’t know your way around a general ledger, we’ll show you the way. 

Preparing Your Business for EOFY 2021

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Let’s be honest: Preparing for the end of the financial year (EOFY) makes your brain hurt. Tax time is simply a pain in your you-know-what. Between unexpected tax bills and finding out your books are less organised than you thought—unpleasant surprises seem to be around every corner. Even if all goes well, the process is still laborious. 

EOFY prep can require catch up bookkeeping when you’re not up to date — filling information gaps for your accountant and looking for lost receipts. Switching to real-time bookkeeping and oversight sets you up to have better reporting for FY 22. Good bookkeeping can equal less tax and a smoother compliance process. Visory can help. 

5 ways to prepare your business for EOFY

In Australia, with EOFY  just around the corner, your business has the chance for a fresh start on July 1 each year. Here are five tips for keeping your headaches to a minimum. 

Organise your records

The best way to make EOFY painless is good record keeping. Ideally, you’ll do this throughout the year. However, if you’re scrambling this year because COVID turned some things upside down, it’s not too late to organise your paperwork. Make sure you hit these key points:

  • Write down all due dates. Lodging your tax returns and records late can result in fines or make your taxes incomplete. 
  • Gather receipts. To be prepared for EOFY, you will need everything from sales records, credit card statements, bank statements and receipts. Anything you tracked in accounts payable or accounts receivable will need to be reconciled and reported. 
  • Organise employee records. You’ll also need to find your records for all wages paid and current superannuation details. PAYG payment summaries, too, because these reports must be lodged at the end of the financial year. 
  • Reconcile bank statements. Most banks will provide records of each transaction. Make sure you have a full report for all business bank accounts on hand as you prepare your end of year financial reports. 
  • Balance the general ledger. Has your ledger been kept up to date? This tracks each transaction by category and will inform your available deductions, as well as help to reveal the overall health of your organisation’s finances. It must be up to date by EOFY. 

Plan deductions and concessions

Many businesses reduce their taxes by claiming deductions and concessions. You might be surprised at how many aspects of your business qualify for a deduction — especially for small businesses. Things like office equipment, motor vehicle expenses, rental property costs, and travel expenses are commonly deducted from your assessable income. 

Ensuring your accounting software is up to date and accurate helps you ensure you won’t miss a deduction. Also, if you’re working with a professional, make sure they are working with the latest software and that their personal licence is up to date. 

Make a compliance checklist

EOFY requirements extend beyond lodging your tax returns. In fact, businesses across Australia have unique compliance needs depending on their size, revenue, and entity type. Do any of these compliance requirements apply to your business?

  • Public Sector entities must prepare financial end-of-year statements in accordance with the Public Governance, Performance and Accountability Act 2013. For more information about the standard parameters document and more, check out this list of compliance-related documents for commonwealth entities. 
  • Media holders in Australia with foreign stakeholders must meet very specific compliance reporting. 
  • Most business entities are required to lodge at least some government reports at EOFY. Section 292 of the Corporations Act 2001 (Corporations Act) outlines more specifically what is required of various entities. This includes public entities, all disclosing companies, and some small proprietary companies. 

Write off bad debts

Writing off bad debts (unpaid invoices, for instance) can be considered a tax deduction. Gather all uncollectible invoices and other extensions of credit and have them ready for reporting. This clears the slate of unrecoverable money owed to your business’ that are owed to your company moving into the new financial year. 

Create a plan for next year

If your EOFY was a pain this time around, you don’t have to simply do it all again next year. With the aid of professional bookkeeping services, you won’t feel the full burden of the necessary reports and tax lodgements. So make a plan now for how you will switch to real-time bookkeeping and reporting moving forward. 

Visory is here to help with catch-up record keeping, payroll and insights, and ongoing internal finance support. Be ready for the next EOFY by partnering with a trusted team of experts now. 

Cash vs. accrual accounting: What’s best for your business?

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There are two primary accounting methods: cash and accrual accounting. The accounting method you choose will affect many aspects of your business, including how you report on business income and expenses. 

Small organisations can choose between accrual and cash basis accounting. However, publicly traded companies must use accrual. 

Additionally, once your business revenue reaches $10 million, you’ll need to use accrual accounting and calculate your goods and services tax (GST). Small businesses with large inventories may also benefit from it.

Let’s talk more about cash vs. accrual accounting and how to get help if you don’t know how to make the change. 

Table of contents

  • What is accrual basis accounting?
  • How does accrual accounting work?
  • What is cash basis accounting?
  • How cash basis accounting works
  • What are the main differences between accrual and cash basis accounting?
  • Accrual accounting or cash: Which one is best for my business?

What is accrual accounting?

With accrual accounting, you track your income and expenses when they take place, regardless of when you pay bills or receive payments. For example, you’d record an invoice when you send it, even if your client hasn’t paid yet. 

Accrual accounting uses a double-entry system, meaning that you track twice, once for debits and another for credits. Double-entry can help prevent fraud and give you a more realistic view of your cash flow. 

Organisations of any size can use it. It provides a more complete financial picture, even when you don’t get paid right away for your products or services.

Here are the key pros and cons of the accrual accounting method:

Pros  Cons
It’s helpful when tracking a variety of accounts and large amounts of revenue and expenses.  It’s more complicated because you have to track actual cash on hand plus outstanding income and costs. 
Making financial projects and planning for the future is easier. Financial reports may need adjustments for as-yet-unpaid amounts when discussing current balances.
By logging cash flow with double entries, it’s simpler to catch mistakes or fraud. Bookkeeping and accounting may be more time-consuming.
It meets acceptable accounting practices and is the standard for public companies.  You could end up paying taxes on income that clients and customers haven’t paid you yet.

How does accrual accounting work? 

Accrual-based accounting is an accounting method that tracks all outstanding credits and debts as if they have already happened. 

If you complete a service, you report it as though you’ve already been paid in your books. Then you debit any invoice totals even if you have not cut a cheque yet. You can see all of your transactions—including long-term, future ones—in one place.

What is cash basis accounting?

Businesses that have an aggregate turnover of less than $10 million may use cash basis accounting to calculate goods and services tax (GST). 

Your internal finance team will only include transactions in tax reporting when money changes hands. In other words, when you make a sale, you don’t have to record revenue until you actually get paid. 

Regardless of annual GST, approved government schools, charitable institutions, and gift-deductible entities can use cash basis.

Here are some pros and cons to consider: 

Pros Cons
It works best for small companies that don’t have long payment cycles. Cash basis accounting can’t show you the debts that are outstanding, and accounts receivable payments that you haven’t settled. 
Cash accounting helps you track cash flow and determine what is in your bank accounts. You may not be prepared for incoming invoices from vendors or suppliers.
It’s simple because you only record transactions at the time they occur. Not all businesses can use cash accounting. 

How cash basis accounting works

With cash basis, you only track transactions when they happen. Each time your company makes a profit, you add to your total revenue. 

When you receive an invoice, you subtract. What it can’t show you is upcoming debts. These may include monthly accounts receivable cheques or recurring bills. 

What are the main differences between cash and accrual basis accounting?

Cash vs. accrual accounting differs primarily in the way you keep records and detail your cash flow. 

It’s easier to track with cash accounting because you only track funds when they come in and go out. However, it doesn’t show the full picture of your financial health. Your cash flow may look favourable, but you could have thousands in unpaid costs that are not readily visible. 

Accrual is more complex but also gives you a more accurate picture of your finances. You’re not tracking only actual funds, but also expected income and costs. If you have a floor installation business, for instance, you would report the project when it’s done — even if the final invoice is outstanding.

Cash or accrual accounting: Which is best for your business?

Either method works for small businesses, but large businesses should stick with accrual. Your internal finance team may need an online bookkeeping service to help with accrual accounting. 

When to use cash basis accounting When to use accrual accounting
You have a simple revenue stream with little time between invoices and payments You have complex revenue and cash flow
You value short-term cash flow over long-term projections You need to know your cash flow total including future projections
You generate less than $10 million a year You generate more than $10 million a year

Small businesses can choose between the two accounting methods. Larger companies must use accrual basis accounting in Australia by law. But even if you don’t meet the mandatory threshold, you might want to switch to accrual to get a better picture of your business finances.

Connect with Visory today, and our team of internal finance experts will get to know your business and which accounting method is right for you. You’ll partner with a team dedicated to your accounting needs and be able to access your books in real-time.

 

Let’s Play Catch-up: What is Catch-up Bookkeeping?

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Has it been a while since you cracked open your accounting software? Oops. When your business grows exponentially, or your bookkeeper hits the road, it doesn’t take long for your books to fall behind. And that can lead to catastrophic results. Catch-up bookkeeping helps you right the ship and make sure you can still keep the lights on. In short, it’s the process of getting your books current and catching any mistakes that you may have missed. 

Not only can catch-up bookkeeping give you a clearer picture of your revenue and overall financial health, but it gets your accounts receivable and accounts payable back on track. In addition, managed books make it easier to grow and help you stay compliant when tax time rolls around. Learn more about catch-up bookkeeping and when you might need it. It might be more often than you think.

What is catch-up bookkeeping?

Catch-up bookkeeping is the process of getting your financial records up to date. This necessary part of bookkeeping includes everything from analysing bank statements to reconciling your accounts receivable.

You don’t just require catch-up bookkeeping after a sustained period of neglected books. Rather, anytime you need to reconcile your accounts or migrate your data, you can use a catch-up bookkeeping service to confirm that you’re working with current information. If you have even a short period between a new bookkeeper, you’ll also want to do some catch-up bookkeeping to start your new staff member off on the right foot. 

When does your business need catch-up bookkeeping?

There are lots of times when you might need to catch up on your books. Some are for your own convenience, while others relate to serious government penalties. Under Australian and New Zealand laws, you have a responsibility to maintain accurate business records. You’re also required to track any transactions related to taxes and superannuation. Your organisation should be prepared to substantiate any of the information submitted on your tax return. 

Tax ready strategy aside, here are some of the most common times we recommend catch-up bookkeeping:   

  • When you need to add accounts. Are your records incomplete? If you’ve been using a new business credit card for a while and haven’t added it into your accounting software then you may be missing months of transactions. You can’t have accurate financial reporting if you don’t actually know what’s coming in and what’s going out. 
  • When you have unreconciled transactions. Whether it’s for a month or just a few days, your general ledger should contain all receipts, payments, and invoices listed by transaction. Missing transaction data could throw off your entire financial picture. Bringing the data up to date means your ledger is back in business. 
  • When you’re migrating to a new software system. Moving over to Xero or similar accounting software? You want your data labelled properly, and that means a little catch-up bookkeeping to make sure you’re entering the most recent and accurate figures. It’s much easier to get everything up to date in your existing software than fix it in your new software than to determine what went wrong in six months. 
  • When you need to prepare reports. If you’re seeking additional funding or want to show stakeholders the financial state of your company, playing catch-up on missing data is crucial. You can’t generate an accurate report without up-to-date figures. You could miss out on an investor if you’re using incomplete reports. 
  • When you aren’t being paid correctly. When your business is not being paid correctly, you may not be able to operate. If you suspect your customers owe you money, you need to catch up fast! Not only could your reporting and tax obligations be incorrect, but you could be leaving money on the table which could be put towards extra staff or growing your business. 

After my books are caught up, what is next?

Once you’re confident your books are caught up, you’re ready to sail, right? Not so fast. Bookkeeping is never a “set and forget” process. In fact, it never ends. Therefore, having a good bookkeeping service at your side is essential to ongoing success. 

At Visory, we partner your organisation with a team of bookkeepers who know your industry inside and out. They can complete catch-up bookkeeping on your struggling records and help to keep everything accurate moving forward.  

Catch-up bookkeeping is essential if you know if your books are unreconciled, payroll hasn’t been processed or your tax office is knocking. Catch-up bookkeeping also comes in handy when you’ve simply been short-staffed, and you know some receipts might have slipped through the cracks. Contact Visory to complete your catch-up bookkeeping, get your books ready for new software or to enable accurate reporting and insights. We’re always here for you.

Life After COVID: How a Bookkeeper Can Help Your Business Recover

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COVID-19 may not be entirely behind us, but the protections businesses enjoyed at the start of the pandemic are mostly gone or coming to an end. For example, JobKeeper is no longer in operation in Australia, and creditors are allowed to pressure companies who owe as little as $10,000. In New Zealand, some wage subsidy programmes are still available as of March 2021, but only if your city activates an Alert Level 3 for seven days.  In short, your organisation needs a plan for the future of your finances and business recovery. 

An experienced bookkeeper can help you get your paperwork in order which can help your accountant advise you on how to create a path toward profit. Instead of going it alone, consider how you can build a team of financial experts who can take you from the brink of insolvency to thriving once again. 

What roles does a finance team play in your business?

An outsourced finance team does a lot more than process your payroll and track your transactions. With the right people, an outsourced finance team can become a vital part of your internal team as well. 

Some of the most important tasks a fiance team for business include:

  • Financial reporting and forecasting. Accurate reporting can help your accountant forecast profits and losses. Forecasting will help you remain profitable after COVID and scale at a realistic rate and. 
  • Track down accounts receivable. Your outsourced financial team can chase invoices that went unpaid during the pandemic, which will help you balance your books on the other side of COVID.
  • Identify cash flow problems. Are you low on funds at the end of the month? Your outsourced financial experts can send you reporting and insights so you can create strategies for keeping more cash on hand.
  • Prepare financial statements for your accountant. Navigating PAYG instalments correctly reduces the risk of incurring government fines and penalties, especially as COVID era protections are lifted.  

How can an outsourced internal finance team help business recovery after COVID-19?

Businesses with an exit strategy in place are more likely to survive any crisis in one piece. In terms of COVID-19, this means being ready when payroll assistance and other forbearances are done for good. And even then, you may still need some help. Can you maintain a solid financial position moving forward without a trusted financial team? Unlikely.

In a post-COVID world, Visory’s financial experts can meet with your accountant and senior staff to help you establish a business recovery timeline—with contingencies included (what happens if there are new travel restrictions down the line?). Our bookkeeping and financial experts can help create a new budget for the next few years; your services/prices/expenses may have changed during COVID. With data and insights, you can determine when you’re ready to bring employees back full-time and evaluate the current salary structure for any necessary changes.  Having in-depth and accurate reporting and insights is essential for your accountant to make the right decisions. Visory can supply your business with an expert back office team that can give your business the reporting it needs to create strategies for recovery and help your team interpret the data. 

Finally, you’ll also need accurate financial records if you wish to ask for a bank loan. Your business recovery will require an expert financial team that is well versed in what businesses are being offered at each stage of post-COVID aid. Your accountant will maintain your general ledger and be on standby to request government aid if it becomes available. They can file applications, complete the necessary reports, and handle any appropriated funds. Visory can ensure that your accountant and back-office staff have the reporting and insights required to apply for a loan.

Why you should outsource your back office

You may not be able to in-house back office support on the heels of COVID. Many businesses have had to cut staff or roll back hours. When you outsource your bookkeeping and greater reporting needs, you can access a whole team of financial experts while saving money. 

An outside bookkeeping service like Visory can also give you an unbiased view of your business. You have been through an emotional few years, and an outsider can be objective about the necessary steps to recover fully. These decisions may include raising your prices, eliminating some services, or making other difficult changes that would be hard to admit are necessary on your own. 

Visory has a clear pricing plan that makes it simple to budget in the future. We know that many businesses in Australia and New Zealand are facing insolvency. Our team includes people with years of back-office support in various industries who can scale your services up and down as necessary. Plus, our financial experts and services are at the ready when you require an additional bookkeeping service, payroll, or other help. 

Having an expert team on your side can make all the difference in times of uncertainty. Surviving COVID as a small business means accurate books and a realistic plan for the future. Visory can help you with business recovery and more, including ongoing payroll and bookkeeping services. 

Do I Need a Bookkeeper, an Accountant, or Both?

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As a small business grows into a medium- or large-sized operation, it may no longer make sense for the founder to balance the books. Imagine a time-starved back office employee trying to itemise and code transactions. With what time? While office managers can fill some of the gaps, a bookkeeper or an accountant must eventually be welcomed into the fold. 

The terms bookkeeper and accountant are often used interchangeably, but in fact, they are not one and the same. The educational requirements, daily schedule, and specific skills of these two roles can overlap but are not synonymous. Let’s look at why accountants and bookkeepers can each help your business–and how to tell if you need a bookkeeper or an accountant. 

What does a bookkeeper do?

Bookkeepers are responsible for the day-to-day record keeping of your business’s money. The duties of a bookkeeper can include documenting financial transactions, posting credits and debits to a balance sheet, processing payroll, generating invoices, and merging accounts. The bookkeeper may also stay on top of the vital records required by the Australian Tax Office (ATO) or New Zealand’s Inland Revenue Department (IRD). 

In short, bookkeepers create the financial records that an accountant can later analyse and use to create more complex reports or file full tax returns. A bookkeeper is the first stage in the accounting process. They benefit your business by tackling daily financial records that must be accurate in order to create useful reports later. 

Who is a bookkeeper? Some bookkeepers are trained by their employers, but other bookkeepers learn their skills by getting a Certificate in Accounting and Bookkeeping and registering to become a BAS Agent. You may want to hire a bookkeeper if you have a tax accountant but need someone to handle your office’s in-house financial records at medium-sized companies. 

What do accountants do?

Not only will an accountant use the records that a bookkeeper created, but they will also crunch the numbers on their own reports. Their work tends to be more senior level and they may even advise the company regarding high-level company decisions. As a result, the salary of an accountant can be nearly double that of a bookkeeper. 

The typical role of an accountant encompasses things like prepping for taxes, preparing financial statements, plotting the growth of your business, verifying that the company’s finances are government compliant, examining revenue and recommending budgets, resolving accounting discrepancies, and setting up accounting processes. When you’re deciding between a bookkeeper or an accountant, you know you’re ready for a full-time accountant if you have the need for financial analysis and advice regarding the impact of financial decisions. 

An accountant may have a Diploma of Accounting or another advanced degree. Many businesses can get by with one in-house accountant, but you may need the expertise of a whole team as you grow and scale. 

When you need both an accountant and a bookkeeper

OK, but when might you need both a bookkeeper and an accountant? There are some benefits to having both roles working side by side. The separation of duties may help you remain compliant with government reporting and provide a built-in cross-checking system. The books recorded by the bookkeeper will be double-checked by the accountant. This can eliminate some mistakes. 

A complicated tax structure may also call for both roles. You want one professional to keep an accurate general ledger and track daily expenditures (the bookkeeper) and another to analyse the books, look for available tax credits, and prepare tax reports (the accountant). If your business is growing and in search of investors, having both a bookkeeper and an accountant also strengthens the financial picture of your growing organisation. 

Do you need a bookkeeper or an accountant, or both? Bookkeeping services keep your day-to-day financial tasks done on time. You’ll never miss payroll again. Meanwhile, an accountant offers more robust analysis and internal financing advice. Larger companies probably need both. Bookkeeping services keep you running smoothly in the present day and accountants make sure the future remains stable. 

If you need a team of financial experts to keep your company’s ship upright, contact Visory. Our virtual teams are tailored to the expertise you need and we can tackle bookkeeping and accounting projects large and small. We’ll become such a part of your team you’ll want to invite us to the holiday party (after we tell you if that can be expensed).

5 Ways Outsourcing Bookkeeping Can Help Grow Your Business

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Accountants are an essential part of any growing business. Not only can a good accountant or bookkeeper keep your balance sheets balanced, but they also help you scale up by taking a myriad of essential tasks off your plate. These tasks include: helping you create your budget and accounting policies, preparing financial statements for stakeholders and the government, keeping track of operating costs, maintaining accounting systems, and preparing tax returns. 

But how do you build a solid accounting team? Even for a medium to large business, the benefits of outsourcing your bookkeeping can’t be ignored. An outsourced finance team can handle everything from your itemised general ledger to your payroll. You get the help of an accounting pro without needing to hire a full-time staff member. Outsourcing often frees up money and time for innovation and product/services expansion, which helps you scale seamlessly. 

Here are five benefits of outsourcing your bookkeeping we think you should explore as your business grows. 

Outsourcing bookkeeping saves money that can be reinvested

As we explained in our guide to outsource bookkeeping, the average salary for a bookkeeper in Australia is almost $70,000 per year and in New Zealand around $68,000 (NZD) per year. Meanwhile, you might be able to get outsourced bookkeeping for as little as $1,000 per month. Imagine how much money you save if you have access to an entire outsourced team instead of hiring in-house bookkeeping experts. That’s a lot of money left for other essential tasks. 

With the money you save from outsourced accounting work, you can reinvest in your company’s other departments. This could mean increased product development, a bigger marketing budget, and other key expenses you need to grow your business. Not only can outsourcing save you money now, but it can set you up for future success. 

Outsourcing bookkeeping is scalable

The right outsourced bookkeeping team can scale with you. What does that mean? As your business gets bigger, your outsourced team can grow with you. A company like Visory can tweak your financial team as needed. That means adding new members to your team with a specific speciality, creating redundancies when necessary, and allowing you to grow your business without pausing to hire a new full-time employee. 

In addition to adding new virtual team members to your business as you grow, the benefits of outsourcing your bookkeeping include assigning additional functions and responsibilities. Some of the things an outsourced team can do for you as you grow larger include:

  • Scaling up back office processes such as payroll and accounts payable that drive your business forward
  • Take on additional financial reports, such as quarterly reports or trial balance briefs
  • Analysing your company’s financial strengths and weaknesses so you can make informed decisions that improve your performance
  • Make accurate forecasts about the future of your business

Outsourced bookkeeping can keep you compliant

Outsourced finance professionals can also help keep you compliant. You don’t have to worry about chaos in your internal financing when your internal financial experts are on the case. Whether you’re reporting to the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC), New Zealand Companies Office, or New Zealand Inland Revenue — you won’t be caught breaking the rules with an expert who promotes good practices. Your remote bookkeeper can also stay on top of your Business Activity Statement (BAS) schedule. Staying up to date on day-to-day data entry and regular book balancing is a lot easier with a robust finance team. 

Outsourced bookkeeping and accounting can help you obtain additional funding

Want to obtain additional funding? You better hope your books are in order! Or, hire an expert team of financial professionals to double-check every figure. As you scale up, potential stakeholders will look for specific financial records. These may include:

  • Historical data about your company’s growth, including income statements and balance sheets
  • Projected financial figures that include projected cash flow and capital expenditure budgets

Outsourcing can relieve the burden on your management team

When you outsource your financial reporting, you ease the entire management team’s overall burden. No one will have to drop other work to process payroll or vet potential tax accountants. The company’s leadership can remain focused on your business’s growth and innovation. Outsourcing bookkeeping allows you to retain accurate internal financial data, so informed business decisions can still be made, but management is free from the mundane day-to-day reporting that may slow down growth in the long run.

The benefits of outsourcing your bookkeeping include freeing up time and money, easing the burden on executives, and scaling up faster. If you need a team on your side, consider Visory. We can pair you with a bookkeeping team that is specialised in your field and ready to get to work today.