December is here, which means the holiday season is upon us as employees and clients take time off from work to celebrate and recoup. However, if you are a small business owner, it can be a season of financial struggle as expenditure goes up, and productivity declines.
Here, Agilis Books have 5 bookkeeping tips for you to consider coming into this holiday season, to keep you on top of your game.
1. Cash Flow Planning
Staff leave needs to be covered in addition to your normal fixed overheads like rent, creditors, and tax compliance. The budget and forecasting process ensures you know your numbers and are prepared. If you are shutting down, you won’t be driving revenue during this period and sales may take time to get started again in the new year, which is why we recommend investing in cash flow planning – you need to know what is coming in and going out of your business.
A good way to keep track of this, is to keep your receipts. An efficient way to keep all your receipts in one centralized location is Xero – they have an online filling system which allows you to store, manage and share receipts and any other documents, contracts or bills safely.
2. Finalize Late Payments and Tie-up Work in Progress Jobs if Possible
It is important to plan and complete jobs or services that can be invoiced and paid before Christmas (remember if you don’t invoice and get paid before Christmas, you may not see the money until mid to late January).
In Xero, they have a contact management feature which allows you to view a client’s payment history, and see if they have any outstanding invoices and bills that need to be paid.
3. Track Business Expenses
It is important to track all your business expenses – from payroll, insurance, rent, utilities, etc., to help forecast your business expenditure.
In Xero, you can track your bills, report payroll details, capture costs and claim expenses, file bills, and see future cash flow projections – centralizing all your expense details.
4. Be Aware of Christmas Celebration Tax Deductions
It is beneficial to be aware of the rules and regulations surrounding fringe benefits tax (FBT) and Christmas parties – FBT may apply to entertainment benefits provided to employees, and if an event or gift is considered to be entertainment then you cannot claim a business deduction or GST.
Click here to read the ATO’s article on Fringe Benefits Tax and Christmas Parties.
5. Utilize Accounting Tools
We’ve used Xero as a prime software example that can prove extremely beneficial in simplifying and centralizing everyday business tasks for small businesses.
Cloud-based accounting tools have been an absolute game changer for business finance, and with features available in Xero such as invoicing, bank reconciliation, bill paying and tracking, GST returns, payroll, payment acceptance, reporting and project tracking (to name a few) – comprehensively safely storing all of your business financial records has never been easier and more efficient. You can also share documents with your accountant and bookkeeper through the app.
Talk to Agilis Books if you are struggling with your bookkeeping this holiday season
If you are having trouble staying on top of your bookkeeping and tracking your finances as the holiday season quickly approaches, contact Agilis Books today!
We can help you utilize the Xero app store and find the best solution for your accounting needs.
Part of this blog was originally published by BOMA, but Agilis Books have added additional information for the benefit of our readers.