What Is Bookkeeping?
One of the biggest questions I get is, can you do my tax return? People plod along or steam along depending on the year they and their business have had, get to the end of the year and THEN think oh dear what do I do with this draw or garbage bag full of receipts its ok I will take it to my accountant. Well actually, there is a difference between bookkeeping and accounting. The simplest way to break it up is this: Bookkeeping is the sorting of the little transactions that happen through the year, the accounting is the working out what these totals mean.
Let’s give you an example, Jo has a retail store, she has been working for herself for seven months she has her bank account set up, she has money coming in and out, sales coming in and she is paying bills. She decides it’s time to go and visit her accountant just to check what she is doing is right, she has been concerned from day one that she might have to do this thing called BAS. Very proud that she has her business bank account set up she heads off with copies of her bank statements to her accountant. Great says her accountant you look like you’re doing lots of sales, can you tell me the total? Um nope says Jo, ok says the accountant, we can work all of this out for you but really you should hire a bookkeeper. A bookkeeper will help you sort all your receipts, sales and bill payments into sections so we can look at the specific totals and see if you need to register for BAS or even more fun if you’re making a profit?
So bookkeeping is a very special section of your business, it’s a piece of the puzzle its own. There are many pieces of a business puzzle of which we will cover another time but for now does that make bookkeeping seem simpler? Let’s do a list:
As you can see bookkeeping really can be the heartbeat of your business and getting a little help can take so much pressure off so you can focus on the fun stuff, the growing the business, your customers; the people you love to help and also how you’re going to spend your pretty pretty profit.