Setting up a business is a difficult task. One of the hardest aspects is the maintenance of financial records. As a sole trader it’s useful to have basic bookkeeping skills. These skills can be acquired through studying business courses. To maintain accurate records it’s vital to have adequate educational supplies and know how.
Basic bookkeeping skills:
- Storing paper records
- Retaining receipts
- Regularly updating computer data
- Maintaining a separate bank account
- Maintain training and a good knowledge base
1. Storing paper records
As a business owner it’s necessary to adhere to legal and industrial standards. Many of these standards require certifications and records of adherence. It is vital therefore for the sole trader or business owner to maintain good paper records. These records, such as details of an ABN or insurance should be kept in an easily accessible place and in an organised manner. This ensures that they are available in the case of audits or inspections.
2. Retaining receipts
For taxation purposes, a sole trader or business person will often deduct business expenses. These expenses are usually recorded by bookkeepers in journals or on computer programmes. A basic bookkeeping skill is to keep paper records of these receipts so they can be compared to other records. This cross referencing of receipts ensures that accurate financial information is provided to the taxation office. It also ensures compliance with tax law and provides peace of mind in the case of an audit.
3. Regularly updating computer records
Most financial records are now kept via computer programs. These programs are easily updated and can save much time and energy. In order to maintain their accuracy, it is necessary to regularly input data in these programs. Regular data input and updating ensures that the information is accurate and able to be cross checked with current records.
4. Maintaining a separate bank account
Every business should have a separate bank account that details income and expenditure related solely to the business. Sole traders in particular suffer from a temptation to use business funds for personal expenses. However, this is not an acceptable bookkeeping practice. To provide clear records for taxation purposes, it is vital to maintain a separate business account. Expenses related solely to the business should be paid by this account and income from the business should also be paid into this account.
5. Maintain training and a good knowledge base
In order to comply with ever changing legal requirements it’s useful to maintain training and knowledge of business law. Short business courses will provide this knowledge. The costs of the course and the educational supplies associated with it can often be claimed as business expenses.
Bookkeeping for sole traders relies on adherence to basic common sense strategies. These include keeping paper records of registrations, retaining paper records of receipts, maintaining a separate bank account and regular training. These important bookkeeping skills basic can provide insurance against taxation trouble and peace of mind when deadlines approach.
Guest Post Author Bio: Tom Mallet is an Australian freelance writer and journalist. He writes extensively in Australia, Canada, Europe, and the US. He’s published more than 500 articles about various topics, including Business courses and Educational supplies.