Organising Your Business Information For Your Accountant

I often have new business clients which are not sure what information to give me as their accountant or bookkeeper in order to prepare Australian Accounting and Tax returns, or Financial statements. So I have put together a brief explanation of a simple method of getting it all together. If you use this simple method you will not only look professional to your accountants but save them time (by doing some of the legwork and having all of the relevant information available) getting you a cheaper accounting invoice by saving accounting time and you money. This is a process primarily for businesses which, do not have an internal accounts or bookkeeper person and simply provide information to accountants to prepare returns.

I want to stress that all good businesses know how well they are doing. In fact many businesses fail because of a lack of current financial information. It is vital you know your current financial position and profit or loss statement ideally monthly or at least quarterly if the business is well established with comfortable cash flow. If you are a business who only reviews their financial position annually, I strongly recommend you consider obtaining more regular financial information. This is so you have relevant information to manage your business and profitability. This can easily be done by engaging in a bookkeeper or accountant who can also come to your office. However if you wish to prepare information for the accountant and bring it to their office here is a quick process for you to complete.

The starting point of accounting is that it is based on recording all transactions from bank statements of all relevant bank accounts including cheque accounts, investments,credit cards and loans. For this reason, businesses should aim to track all business transactions through one of their bank accounts and hence have little or no cash transactions. If you have cash transactions you may need to provide additional information.

Step one
The first simple step is to collate all your bank statements of all business accounts, credit cards and loans for the period you need to report on. Some examples to illustrate the periods involved for a tax return 2010 you’ll need to gather statements from 1st of July 2009 to 30th of June 2010, or for a BAS return March 2010 you will need to gather statements from 1 January 2010 to 31 March 2010. You should receive all statements from your bank, if any are lost or misplaced your need to reorder from your bank incurring normally a bank fee. Sort this out before you provide the accountant your information. Better still accountants love to get electronic files of your bank statements as they are quick and easier to data entry, contact your bank to do this.

Step two
Once you have collated all bank statements review all individual lines and code them with relevant information (write a relevant description of them if not obvious from the bank statement line entry). For example all credit entries all money going into your accounts, you should indicate if they are income or sometimes they are owner contributions. With all money expended (money out) from accounts, you should also be describing relevant details especially cheque numbers and EFT transfers. Remember any additional information may be useful to your accountant such as asset detail so they can process specific taxation rules. If you are GST registered, you should also indicate whether the transaction involved GST or was GST free. The more you code the more you make your financial reports accurate and speed up things for your accountants processing which will lead to cheaper fees.

Step three
If you have coded all bank statements as for step two and have made sure all relevant bank statements have been collated. You may provide this to the accountant so that the financial report can be prepared. However, as tax law requires substantiation of your transactions and keeping these records, I would also suggest, attaching all relevant invoices relating to transactions on each bank statement. There may be a few transactions which do not have invoices such as bank charges and direct debit all regular charges loan payments etc. You may have other ways of filing invoices which are also acceptable.

This has been a quick outline of how to provide information to your accountant to prepare your financial or taxation reports. It is advisable eventually for a business to take the next step and to complete it’s bookkeeping internally which may result in even greater savings. I recommend this is done with the combination of internal resources, suitable accounting software and professional accounting involvement to control and develop the financial information further. Speak to an accountant or business adviser on this issue or to discuss installing an accounting software and training you to do some of the work. Often this will streamline some of your other administration tasks such as payroll, quoting and invoicing customers, knowing which debtor accounts are due or to facilitate a purchase ordering system, and to better track creditors or cash flow.

However, if you know book work is not an optimal use of your time and do not have internal resources, please do use a professional registered BAS agent, TAX agent (in Australia) or registered accountant in your country. But, perhaps consider updating your financial information on a more regular basis. I also had a recent experience with a client who did not wish to prepare their accounts themselves, but is available when I am coding their transactions; they were also able to see how the financial report is put together giving them a better understanding of the financial information. I also recommend that you do query, and get involved with the information provided to you at a summarized level so that you are sure that it is correct.

Overall, the key to book work is to do it regularly to stay on top of it and to complete while many transactions are fresh in your memory. Having up-to-date financial reports will give you a greater sense of pride in knowing how your business is tracking. By having current financial information you are in the much more informed position to make better business management as against having only annual and lagged financial information from your accountant.

General Ledger Accounting – Keeping Track of Your Business Information

If you are in business, you have data-it’s just a simple fact. It’s what you DO with that data that can greatly affect your business success. Do you throw all of your invoices and receipts into a drawer? Or worse yet, do you not even keep that information at all? Doing either of these leaves you in the dark about your business finances, which can quickly end in the demise of your business. This is why general ledger accounting was created. General ledger accounting is a system whereby, in a double entry accounting system, each transaction is posted using debits and credits. The purpose of general ledger accounting is to know where you stand financially, so you won’t have to guess about your financial position, and you can make better decisions.

To record, in the formal sense of accounting, means to make an accounting entry in a journal or in a ledger. What has previously handled in a paper journal is now typically handled by a computerized accounting system. The analysis of business transactions in the form of old-fashioned journal entries is still important; it is merely handled in a different (and more efficient) method as technology has grown over the years: with a computer and software.

Each transaction must somehow be recorded so that people may be able to refer back to the details of that transaction. The ‘journal’ serves as a diary where each transaction is recorded. The next step is to take the same transactions and record them into the ledgers. Journal transactions are recorded chronologically as units. The ledger is organized into as many different accounts as needed to accumulate the pieces posted from the journal, and are classified according to significant financial elements.

Once a general ledger accounting system is set up and in use, it provides extremely useful information to the business owner, allowing him or her to base future decisions on solid financial information.

The Importance of Comprehensive Business Information Services

Imagine this situation, you have been staffed with the responsibility of performing due diligence for your organization. Where do you start? What types of research will you need to perform? What type of public record verifications will you need to conduct to protect your brand’s value?
Business information can take many forms. An organization’s ability to access information can be a critical component to having an ability to mitigate fraudulent patterns. Knowing the individuals and organizations you are doing business with is essential.
The Need for Due Diligence:

Consider the risk of potential exposure during the most simple of business transactions. To help mitigate exposure companies must rely on a series of public record sources. Today’s business world occurs in a fast pace environment. There is a strong need to have a complete due diligence solution that is flexible enough to keep pace with the fast demand for information. Below is an example of on demand due diligence services for domestic and international searches:

– Lawsuits

– Judgments

– UCC Filings

– Watch List Searches

– Media Publication Searches

– Bankruptcy Records

– Tax Liens
Comprehensive business information research involves a variety of channels. Information can be acquired through several types of searches and verification methods. Consider the need for credentials verification. Verification can occur against a variety of individual and organizational credentials including:

– Professional Licenses

– Insurance

– Corporate Status

– Diversity Status

– Business Locations

– Sanctions
Another type of verification is identity verification. Companies focused on performing identity verification will want to be conscious of the following types of verifications:

– Social Security Verification

– DOB Verification

– Address Verification

– Business Tax ID

– Business Affiliations

– Watch List Review
Creating a Complete Due Diligence Solution:

Due Diligence is about having access to the right information when you need it. If you need to find public records, or perform an id authentication then you’ll need to turn to a variety of public record sources. In the fast paced environment of today’s business world having access to single platform can significantly decrease the time needed conducting due diligence. Here’s how a complete due diligence solution works.

– Critical documents are retrieved by document retrieval specialists from courthouses (federal, state and county) and Secretary of State Searches relative to bankruptcies, lawsuits, liens, judgments and more.

– The above searches are combined with supplemental information such as corporate entity verification, watch list searches, media publication searches and UCC filing searches.
Information to Make Well Informed Decisions:

When information is able to be gathered under a single platform the ability to make well informed decisions becomes easier. Spending the time to individually perform the searches discussed in this text can be time consuming and expensive to implement. By looking to outsource the research process and integrate the results under a single platform you are performing the needed due diligence with increased speed and efficiency. More important by reaching out to a team of nationally trained document retrieval specialists you are allowing your organization to leverage the skill set and effectiveness of a dedicated staff that can provide you with the on demand public record searches that are essential to your organizations need to verify information about the individuals and organizations you are conducting business with.

Small Business Information You Need to Know

Are you thinking about starting up a small business sometime in the near future? There are a few things that you will want to know before you open your doors for the customers to come in. If you try to start a business large or small without first having all of the facts about that business you may not be as successful as you hoped you would be. You will want to take the time to make sure that everything is in order before you put your small business plan into effect.

One of the first things that you will want to make sure that you have is a small business license. Every business large or small has to have a license to operate in the county that they are located in. You will have to go to the court house in your county and inquire about purchasing a business license before you can actually call yourself a business. You will have to give them your business name and pay the required fee.

Next, you will want to make sure that you have a small business bank account so that you can keep all of your business finances in order. You do not want to get your business revenue mixed up with the grocery money from your personal account and it can be a big mess to straighten everything out if you go too long without establishing a separate account for your small business. It will also be helpful for you to start building a business relationship with the people at your bank so that you will have an easier time getting approved for loans when you need them.

Another thing that you will want to know about before you start your business is online marketing. By taking the time to sit down and learn some basic information about internet marketing you will be able to reach out to customers from across the world that want to do business with you. These are customers that you would not otherwise have the opportunity to do business with and are ones that will be very valuable to you once you start.

There is several other information that you will want to know about a small business before you start one up. It is not as easy and glamorous as most people try to make it out to be. You will need to do a lot of planning and make sure that you have everything that you need in order to be successful. You can make it if you have everything organized before you open your doors.