Tag: Bookkeeper Hastings

April 21, 2020 Accounts, Bookkeeping

How Do You Invoice During A Crisis?

Communicate

It’s not easy to request payment right now, but it is important to keep cash flowing into your business so you can cover expenses and meet your obligations to others. As with all business dealings right now, a little empathy and a lot of open communication can go a long way.

The following tips might be useful to keep in mind when you are asking for payment.

Communication – Connecting with your customers is important. Try to make it personal to their situation rather than a one-size-fits-all email. Connecting on a more personal level shows you value them and are conscious of the impacts that the current situation may be having on them. The empathy you show now will also be remembered when business returns to normal. Be proactive – early communication will help you stay on top of cash flow and will also alert you, if you need to account for late payments.

Add value – Use your expertise to give something back. Surprise and delight your customers by offering something over and above your usual services. It could be as simple letting customers know you want to help and being open to requests, offering a one-off discount or an offer just to chat one to one.

Offer flexible payment options – for customers who can’t pay in full, consider breaking invoices into multiple payments with payment terms moved to a longer timeframe. Set up a credit card facility to give customers other options for payment. After all, the easier you can make it for them to pay you, the quicker you will get paid. If you don’t have payment services set up in your Xero account, we can help you do this. Offering a discount for early payment might provide the incentive for customers who can settle, to pay your invoice before others.

Keeping cash flow going is vital for your business so the earlier you can communicate with customers the better.

February 5, 2020 Accounts, Bookkeeping

How Healthy Is Your Working Capital?

We all know that cash is king when it comes to business success, but what exactly is ‘working capital’ and how does this financial metric help measure the health of your business?

Working capital is made up of the cash and assets that are available in the business to fund your operations and keep you trading. It’s worked out by taking your current assets (the things you own) away from your current liabilities (the things you owe to other people).

So, why is working capital such a critical metric?

Having the liquid capital needed to trade

It’s possible for your business to be busy, successful and profitable, but for your cash position to still be in poor health – and that can have a serious impact.

If you can’t readily convert your assets into liquid cash, it’s a struggle to meet your cashflow goals, pay your bills and fund your day-to-day operations. But with the optimum level of working capital, you strengthen your balance sheet and put the company in a solid financial position.

To achieve this healthy level of working capital you’ll need to:

  • Proactively manage your cashflow – cashflow feeds your working capital by pumping liquid cash into the company and keeping the balance between assets and liabilities in a strong position. But to achieve this, it’s vital to achieve a positive cashflow position, where your cash inflows are greater than your cash outflows. This means getting paid on time, lowering your outgoings and keeping a close eye on your ongoing cash position.
  • Monitor and forecast your financial position – running regular financial reports helps you stay in control of your finances. With careful monitoring and forecasting of your cash position, you can ensure you don’t end up in a negative cashflow position, without the requisite working capital to trade and fund the next stage in your business plan. Cloud accounting software and business intelligence apps have made it easier than ever to create up-to-date, real-time reports and run dashboards that show your key metrics.
  • Use additional finance when required – if working capital is looking thin on the ground, then additional funding may be needed to bolster your balance sheet. Short-term finance options (such as overdraft extensions or invoice finance) and longer-term business loans can be needed to keep working capital on an equilibrium.

Talk to us about optimising your working capital

Working closely with your bookkeeper is vital if you want to promote the ideal level of working capital in the business. We can help manage your cashflow, monitor your financial metrics and provide access to additional finance and funding when your capital needs a boost.

Get in touch to start maximising your working capital.

January 22, 2020 Uncategorized

Start Your Year Off In The Performance Zone

Getting back into work after a break can be hard.

You might be struggling to get back into your routine and engage your brain in work. Or, perhaps you spent time setting your goals and planning your year and you’re full speed raring to go. There is however, an optimum approach somewhere between these two scenarios – we call this hitting the ‘Performance Zone’.

The ‘Performance Zone’ sits between the ‘Comfort Zone’ and the ‘Danger Zone’.

It’s easy to hang out in your Comfort Zone. We just keep doing what we’ve always done because so far it’s worked… and there’s no motivation to change. However, sitting comfortable in times of such rapid change can leave you exposed. Your competitors, those working in the Performance Zone, setting goals and making incremental changes and improvements, could squeeze you out.

Working in The Performance Zone enables you to break bad habits and form good ones, achieve your goals and improve the value of your business. When working in your Performance Zone, you’ll be engaged in your work and adopt new learnings, processes and technology to streamline your business and make it more efficient.

Be wary of putting the full throttle down though. If you stretch too far out of your Comfort Zone, past the Performance Zone, you may find yourself in the Danger Zone. Committing to a massive amount of change all at once can lead to volatility, burnout, mistakes resulting re-work, the loss of a key team member and cause you to work even longer hours for no gain (apart from stress gain).

The aim is to set goals and implement changes to move beyond your Comfort Zone into your Performance Zone. If you do find yourself hitting the Danger Zone, it’s ok. Retreat back into your Performance Zone… not back to your Comfort Zone. You’re here to improve your business performance, that won’t happen from your Comfort Zone.

This concept applies to your entire team.

Motivate them to work in their Performance Zone instead of their Comfort Zone but have processes in place to prevent their burn out. If you notice someone coming in early, staying late and visibly stressed, find out why. Speak to them about the Performance Zone and offer support to help them manage their workload, prioritise work and reduce their stress levels.

Want help reaching your Performance Zone? Get in touch to find out how we can help!

September 18, 2019 Uncategorized

Finding Work-Life Balance

Looking for a little more work-life balance?

Sometimes it seems impossible when you are in the thick of it. The following ideas might help provide some light at the end of the tunnel.

Prioritise – Work often dictates to us, rather than the other way around. Create a list of all the things that need doing and categorise them. For example, work out the tasks that are ‘important but not urgent’ and ‘urgent but not important’. Task or project management tools like Trello can simplify your workload and and help to prioritise your time.

Delegate – Letting go can be an opportunity for others in the team to shine. Alternatively, bring in a contractor to help clear the load and you may find they bring in new ideas, create opportunities or streamline the process. Don’t limit yourself to what’s on at work – think about what would help at home too, such as a meal kit delivery to simplify the end of the day.

Book it in the diary – We are all guilty of putting off an exercise class or a coffee catch up because work takes over. These events are important for your mental and physical health and may give you space for creative thought or the ability to think with more clarity. Plus, you’ll return to work feeling more productive. Book it in and consider joining a group so you are more committed to turning up!

Use the technology to help you – ‘Always on’ technology such as smart phones are designed to make life easier but we’ve ended up busier than ever. So choose the apps and tools that can reduce the stress. Whether it’s for communication and meetings, or your filing and accounting. An app could save you time and allow you to get on with other things.  We can help with the right accounting software solution to reduce the paperwork.

Share with your network – Are there individuals in your network who face the same challenges or can help you achieve your goals? Set up a monthly breakfast to catch up, support and learn from each other. You’ll go back to work with new inspiration.

Do what you love – At the end of the day, your work is ‘part of’ your life not separate from it, so if you enjoy it, you’ll feel you have more ‘balance’.

Get in touch to talk about how we can help you achieve balance in your business.

September 12, 2019 Accounts, Bookkeeping

Choosing a new business bank account?

A business bank account is an essential requirement for any business. But with so many banking providers out there, how do you know which business account to choose?

The key is to know what you require from a bank account and to choose a bank that understands the banking, financial and funding needs of your business.

Choosing an account that fits your business needs

Whether you’re a new sole trader or an established limited company, it’s advisable to maintain a clear divide between your personal and business money. So, it’s vital to open a business bank account, giving you a separate account to handle your business transactions.

The choice of available accounts can be baffling, with the big corporate banks and high-street providers offering a range of accounts and new digital challenger banks also adding to the available options for business owners.

When looking for a business account consider:

  • Bank charges – some banks offer free banking, others will charge you a monthly fee. And most accounts will charge you for things like cash withdrawals, payments in foreign currencies and going into (or over) your agreed overdraft limit.
  • Earning interest – look at the interest rate paid on the balance in your account. The higher the interest percentage, the more money you’ll earn on the cash in your account. The rate is unlikely to be high, but it’s still worth assessing the potential for a return.
  • Overdraft facilities – cashflow can ebb and flow in any business, so an agreed overdraft facility can often be a lifesaver when cash becomes tight. Look at what overdraft is available and what you’ll pay in penalties if you exceed the agreed limit.
  • Access to finance – if working capital gets exceptionally low then you may need to borrow a lump sum of money. If the bank has attractive options for bank loans, invoice financing or asset financing, that gives you and your business more flexibility.
  • Mobile apps and technology – digital is changing the banking sector at an incredible pace, so look at the quality and functionality of the banks internet banking, mobile banking apps and online financial management tools. Many of the emerging challenger banks are digital-only and offer a great online experience for business users.
  • Support and relationship management – the big banks have cut back their bricks and mortar presence on the high street in recent years. Look at whether you’d have access to a business banking adviser, or whether support is all online or done over the phone. A good relationship with your bank is invaluable when cashflow is tight.

Talk to us about selecting your ideal bank account

If you’re in the market for a new business bank account, come and talk to us. We’ll help you understand the key requirements you need from your account.

August 28, 2019 Bookkeeping, Uncategorized

Automation can ease your business workload

Small and medium-sized businesses are spending on average 120 hours a year on admin tasks, according to recent research into productivity at UK SMBs.

If your people are spending 120 hours wading through tedious and unproductive admin, that’s bad for the business and for your overall efficiency. Fortunately, technology and software automation can go a long way towards automating the low-level admin tasks.

Better productivity through automation

Automation is an important way to ease your business workload, with a host of different business apps and cloud solutions offering ways to automate your admin.

With ‘smart business tools’ increasing in number and choice, software is utilising automation algorithms, artificial intelligence (AI), machine learning and cognitive solutions to help remove the mundane admin tasks from your workflows.

Core processes that will benefit from automation include:

  • Automated bookkeeping – Just take a photo of your receipts, expenses and invoices and ‘optical character recognition’ (OCR) technology will digitise the output and pull it through into your accounts software. No data entry, no human error and no lost receipts! We can do the rest to ensure your records are accurate.
  • Automated credit control – chasing up debts and late-paying customers takes time. Automated credit control apps track your debtor numbers and automatically sends out customised chaser emails as soon as an invoice is late. This reduces your credit control time, speeds up cash collection and cuts your aged debtor figure.
  • Automated payment collection – the easier it is to pay you, the faster your customers will pay. Automated card payments and cloud-based Direct Debit solutions allow you to automatically take payment from a customer as soon as an invoice is due. Some solutions will even automate the invoice matching and bank reconciliation process.
  • Automated reporting and forecasting – the better your reporting and business intelligence, the easier it is to make informed decisions about your company strategy. Accounting platforms and fintech (ie. financial technology) tools now offer automatic, real-time reporting and forecasting, giving you access to the important numbers and metrics, fast.
  • Automated digital marketing – digital marketing is key to raising your brand’s profile. Marketing platforms offer important time-saving ways to schedule and post social media content, or email automation that sends a pre-programmed cadence of emails to specific target audiences within your wider customer base.

Talk to us about embracing the power of automation

If your admin is starting to hold you back, come and talk to us about how automation can pick up some of the heavy lifting as well as giving you the metrics you need for decision making. We can review you business processes and identify the automation opportunities, helping you choose the best apps to drive your business efficiently.

August 28, 2019 BAS, Bookkeeping

Cash vs Accrual Accounting – It’s All About Timing

What are the two methods?

Understanding cash and accrual accounting comes down to timing.

  • In a cash-based accounting system you recognise income and expenses when they happen, that is, when the money arrives into or leaves your bank.
  • In an accrual-based accounting system, income is recognised at the date the customer is invoiced and expenses are recognised at the date of any bills received. The timing of income and expense reporting is independent of when the money hits or leaves your bank.

Let’s have a closer look.

Cash accounting – this method does not recognise accounts receivable or accounts payable. Each Business Activity Statement (BAS) is prepared on money received and spent within that BAS period. Whilst you still have to manage cashflow and planning, the financial activity is more aligned with the business activity.

This simple system makes sense to many small business owners as they are generally operating on a short lead time for bills and invoices. This means you get an immediate snapshot of the money you have in your bank accounts, although you still need to be aware of upcoming liabilities. Remember – Not all the money in your bank is profit! Cash-based accounting is available to businesses with less than $10 million turnover.

Cash accounting requires a good understanding of financial reports to get a true picture of the business financial position. There are many small businesses that have their activity statements prepared on a cash basis, while their tax returns are prepared on an accrual basis.

Accrual accounting – this method does recognise accounts receivable and payable and is a more complex system suited to larger businesses. Reports are prepared taking into account GST on invoices issued and bills received, regardless of payment.

This method requires a greater understanding of the balance sheet accounts and cashflow planning. The bookkeeping processes and accounting can be more involved, requiring movements to be made to allocate funds to the relevant accounting period. This method is better suited to businesses that allow for longer payment terms, contracts that are paid over time and have large accounts with suppliers.

Accrual accounting actually shows your true financial position when your accounts receivable and payable and other liabilities are kept up-to-date and accurate. This means you know what people owe you and what you owe others, so you can make well-informed business decisions and plan longer-term.

Here’s an example:

  • Ace Accounting issues a bill to you for services dated 15 June and due to be paid by 15 July.
  • If your business is on a cash BAS and you pay the bill on 15 July, this bill is included in the July BAS (or September quarterly BAS), even if you entered it into your accounts dated 15 June.
  • If your business is on an accrual BAS, this bill is included in the June BAS, regardless of when you pay the bill.

What’s best for your business?

Micro and small businesses are better off with the simpler cash BAS system. However, as a business evolves into a larger more complex entity, even if it has not yet reached the compulsory accrual threshold of $10 million, it can be beneficial to swap to accrual accounting for both BAS and tax returns.

Not sure? We can help you decide whether accrual BAS reporting is right for you, please call the friendly team at Flawless Figures Bookkeeping.

March 26, 2019 Uncategorized

Invoices – What should you include?

When you’re running a small business or working for yourself as a contractor, getting paid relies on sending your invoice. And because getting paid, and on time, is essential to staying afloat, it’s important to make sure that you’ve got all the important information included. Setting up your invoices correctly will ensure you get paid quicker. Here’s what you need to cover.

If a customer asks you for a tax invoice, provide one within 28 days. Your invoice needs to contain the following:

  1. The words ‘tax invoice’, ideally as a heading.
  2. Your business or trading name.
  3. Your contact details- these aren’t technically required for invoices for under $1000, but it’s a good idea to include them in case the recipient needs to get in touch.
  4. Your ABN or ACN.
  5. The date you’re issuing the invoice.
  6. An itemised list of what you’re invoicing for, including the price for each item or service. Make sure that you clearly indicate whether GST is included in the total price.

If you are using accounting software simply fill in the templates or you can see some examples of invoices on the ATO website.

A well set out invoice will make it easier for your clients and customers to pay you. Accounting software will make the job easier by providing the format for your business and increasing your efficiency. Talk to us about your invoicing to ensure you make it easy for people to pay you.

August 9, 2018 Uncategorized

5 Reasons To Move To A Cloud-Based Accounting System – Flawless Figures

Talking about online accounting, every day more and more businesses are turning to cloud – the platform where you access the data online anytime, anywhere, from any device.

Comparing with traditional Desktop versions, cloud-based versions may have slightly different functionality but they are versatile & provide long-term viability. Their peculiarity to get easily deployed, managed and upgraded than the contracts of the past, makes it an ideal choice. Although, it simplifies your accounting process from start to finish.

Benefits of Cloud Accounting:

Ease of Access:

Accessibility is the prime benefit of cloud-based bookkeeping. While using that old desktop-based system, all your data & accounts are on the local drive. Consequently, you get stuck in one location – resulting in limited access to your data & financial information.

However, with the cloud-based accounting, you are no more restricted. All your data is safely encrypted and stored on cloud-server. In order to access your business’s financial data from anywhere worldwide – whether you are traveling, gaining new clients or taking care of other important business matters – all you need is your device and an internet connection.

Cost:

Eliminating the need for expensive computer equipment and resources to set up and maintain office servers, it cuts the wide amount of cost for your business. Thereupon, it is the most economical way to go.

Usually, there is a monthly subscription fee in the cloud-based systems – in which updates in software and hardware are done automatically by the service provider. This helps you in staying always up-to-date at a reduced implementation cost.

Collaboration:

Well, in the desktop approach, there is limited access to the accounts. Hence, the collaboration with other colleagues & advisors is difficult.

On the other hand, cloud-based approach lets you view real-time accounting information anytime, anywhere. As a result, Key People can stay connected with up-to-date information, regardless of the location.

Security:

Keeping your data secure is critical for any organization. When you are using a cloud-based system, all your data is stored online with Military level encryption. Also, it includes backup functionality to prevent the possibility of data loss.

Even if your computer is stolen, no one can access your data unless they have a login to the online account. Your data is safe and backed up because your data is no longer at a physical server in the office. Thus, it also controls the privacy access of confidential data.

Free Storage:

All the records – file, information, and data are stored online on ‘cloud storage’. This means there is no need to install anything on local hard disks. It saves a huge amount of storage & hence reduces cost. Although, every time you log in to your account, you will get to the most up-to-date version of the software – without paying any extra cost or without updating it yourself.

This proves that cloud accounting is an accessible, cost-effective and secure solution – regardless of the Industry or firm you are competing in.

Being a business owner, you might have exclusive entrepreneurship skills but if talk about financing and accounting, it could be a tedious distraction. While you are focusing on building your brand and growing your business, it is too burdensome & toilful task to manage your bookkeeping concurrently. Thus, to alleviate your stress & pressure, Flawless Figures has come across exclusive cloud-based bookkeeping services involving Business setup, Payroll, Bank Reconciliation, Accounting software & much more.

July 6, 2018 End of Financial Year

Top Tax Deductions for Tradies!

tax deductions for tradies

Tax deductions are a great way to claim back hard earned money at the End of Financial Year. Below is a list of a few common expenses that that tradies could be claiming back in their tax returns!

Transport
If you are using your vehicle as your main method of transport to get you from one job to another, then as long as you can prove that you are using your vehicle for business use, then you are able to claim back the costs associated with that vehicle.

Using one of two ways to track your mileage, you can to claim back the cost of running your vehicle for business use.  Firstly, the log book method means that you will need to prove your odometer readings for a period of at least 12 consecutive weeks. By tracking the mileage you can claim the percentage of vehicle expenses allocated to business use, including running costs and depreciation.  Alternatively, the cents per kilometre method allows you to claim $0.66 per km on up to 5,000 kilometres of business travel.

Tools and equipment
Tools and equipment that you purchase to help you run your business can be claimed and so can repairs and maintenance on the tools and equipment purchased.

Training courses, licences and certificates
If you’re undertaking any professional development or studying for any qualifications that relate to your trade, you are able to claim back the cost. The course must be to improve or maintain your skills in your profession in order to claim it as a tax deduction.

Uniform and Protective Clothing
If you purchase certain protective clothing or items for your work, such as hard hats, sunglasses or steel-capped boots, you can claim them as a deduction. This also applies to clothing needed to distinguish you from the public, like a uniform.  You can also claim the cleaning and laundry costs of your uniforms.

Communications
Don’t forget about all of that time that you spend on the telephone and sending emails for business purposes as you’re also able to claim back the cost of work related phone and internet expenses.

Travel 
Any expenses associated with travelling for work , such as accommodation, meals and transport costs e.g.  taxi fares, tolls etc, can be claimed as long as you have your receipt.

Subscriptions
Union fees and subscriptions to professional associations that relate to your business are also claimable in your tax return.

Not sure if it’s claimable or not?  Ensure you keep a copy of your invoices and receipts and if you’re not sure whether it is claimable or not, check with your bookkeeper!

If the thought of keeping track of your income and expenses is totally overwhelming, contact Flawless Figures on 0414 859 665 or email [email protected] so we can help you alleviate the stress at tax time.

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