Gold Coast Mobile Bookkeepers and Bookkeeping Services

A good bookkeeping system is recording Expenses and Income in appropriate accounts

The basic building block to a good bookkeeping system is recording expenses and income in appropriate accounts. The tricky part is to make certain that whoever enters the data understands the true nature of each and every expense, and is able to put it in its right place.

Data Entry
Businesses need to have up to date and accurate account of their business income and expenses. While concentrating on their core business, financial record keeping can easily become overwhelming for many business owners. Out of date or poorly prepared records can actually hinder their business.

Professionally prepared financial records provide powerful information tools that enable better management of the business.

These records and reports enhance any interactions with accountants and financial institutions, so the business owner has an accurate picture of the financial status to make better business decisions.

In any business, money comes in, and money goes out. Generally money that comes in (Income) is through sales of goods, products, or through providing a service (i.e being paid to do a job such as bookkeeping, for a client).

Other money that may come in to a business could be through loans from the business owner (private funds), the Bank or financial institution, Grants or capital injection from other sources.

Money that comes out of the business can fall into a number of different categories also. This money may be classed as expenses, including purchasing raw materials / components/ products all involved in making up the goods being sold. Other reasons that money comes out of the business maybe for personal use (Drawings), wages or to pay back loans.

This is where a basic understanding of accounting is very important, and it is the where the skills of bookkeeping are truly recognised.

Not all businesses are the same, and where an item may be seen as an expense in one business (i.e cutlery for a catering business) would more likely be a personal expense in another business (i.e an electrician buying cutlery would most unlikely be using that cutlery to further his business).

When the tax office comes to audit a business, claims for items that are not business related can result in heavy fines. A recent example has been with the Tax Office scrutinising owners of investment properties that have been making purchases for materials used in their family home and claiming them as a deduction for their investment properties.

Clients will often fill their work vehicle with fuel at a service station, and then buy confectionary, bread, milk and other grocery items at the same time, all in a single transaction. When that transaction is recorded, the bookkeeper must ensure that only the fuel component of the transaction is recorded as a business expense, and the other items would be reflected as a personal expense, (i.e Drawings).

Incorrect data entry would not only misrepresent the total spent on fuel at the end of the reporting period (which would affect calculations in costings and future budgeting) but it would also affect the total “Cost of Goods Sold” and “Profit and Loss” figures.