Grow your Business with Great Record Keeping

Posted 11 Dec '19

When you think of record keeping you might just think of filing away a fuel receipt in a folder or attaching an invoice to a bill in your online accounting software.

And yes, in a nutshell, record keeping is the action of documenting your required records for the ATO and compliance purposes. But if we look past your general obligations and dive into the impact that great record keeping can have on your business, there really is a lot to be said for having up to date, accurate and tidy books!

How to grow your business with great record keeping

We can assume that most people reading this would have an online accounting software in place, such as Xero or one of the other platforms… and if not, chances are you want to get there, so we believe to start as you mean to go on!

The great thing about having an online accounting system like Xero, is that you have the ability to produce high-quality key business driver reports and understand how your business is performing at the click of a few buttons.

The catch is that to utilise the software to your advantage, it has to be up to date, accurate and consistently maintained (i.e. daily and weekly practices like reconciling, processing payroll/super, inputting bills and invoices).

This is where great record keeping can be used to your advantage

At any given moment, an up to date Xero file can show you:

• Your Gross Profit Margins
• Your current outstanding debtors – Who owes you the most money
• How much GST or PAYG you’ll have to pay the ATO at the end of the month or quarter
• The amount of cash you pulled in or spent in a month
• The quantity of sales you had to make to generate your weeks income
• The amount you’ve spent on contractors or materials in the last week

and so. much. more

So how can this impact your business?

Let’s say for example that your ‘up to date’ records show that your turn over is consistently similar, however, month by month more money is leaving your bank account than what’s coming in.

This might simply be a debt collection issue (no one’s paying on-time) or you’re selling a lot of higher value products/services that take longer to produce/have longer pay terms than quick cash turn around items/services, that usually assist with steady cashflow.

Whatever the case may be, it’s being able to assess circumstances with insights like these that could help you turn a situation around quickly but putting in some simple processes. At the very least, it can let you know what’s going on which is so powerful in decision making as a business owner.

If you rarely look at accounts, have many unreconciled items in your accounting file, miss bills/pay runs or receipts and invoices, it may be a lot harder to assess what your business numbers are really telling you and where you need assistance – it’s okay to ask for help!

How can you start applying this to your own business?

If you want to make some changes in your business next year, what ever they might be… Hit up your pals at Empire Accountants in 2020 for some Xero training, bookkeeping support or automation. We’d love to help you understand your numbers, get a handle on your record keeping and make it your best year in business yet!

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Blog written by: Empire Bookkeeping