Your Financial Foundations
In order to accomplish this, you need to have solid, reliable foundations in place for your financial management and record keeping.
By embracing cloud technology such as Xero and Dext (formerly ReceiptBank) your bookkeeping process is streamlined, allowing your accounts to be maintained at the highest industry standard and geared towards the generation of Purposeful Profit.
Understanding how your financial data can be used will enable you to effectively forecast your cash flow and plan for profit.
There are two primary reasons that you need to maintain good financial records for your business:
1. The Australian Tax Office requires you to submit your periodical returns (PAYGW, BAS & Income Tax) which detail the financial operations, (revenue and expenditure) of your business. This information needs to be kept and accessible for a period of 7 years in the event the ATO wish to verify your trading data via an Audit. (This is referred to as Compliance)
2. Because you’re a pro-active, savvy business owner who knows the true value of having up to date, accurate data that can be used to plan for future growth and development within your business. Not only that, it makes meeting the ATO’s reporting requirements a breeze and can provide you with a snapshot of your financial position at the drop of a hat.
So, keeping good books is crucial to ensuring you’re meeting your obligations as an Australian Small Business Owner in addition to providing you with valuable, live, data that you can actually use.