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Got cash for Christmas?

It would be nice if you could send an invoice, then sit back and watch the money roll in.

But half of all invoices are paid late. And some aren’t paid at all.

So how do you handle outstanding invoices so you can be sure to have cash for Christmas?

How to collect money

Some people – like credit control managers, accountants and debt collectors – make a living out of getting invoices paid. Their methods aren’t rocket science. Just a mix of persistence and courage. If you’ve got outstanding invoices, try their techniques on how to collect money (and many experts recommend starting at number 4, by the way).

1. Write a payment request letter or email

This is your first move when someone is late paying an invoice, so there’s no need to overthink it. Open your note with a polite greeting, quote the invoice number, say when it was due, and ask when you can expect payment. There’s no need to explain what the invoice was for. The details should be on the invoice itself. Keep the letter or email really short.

2. Send an overdue invoice

You could send an overdue invoice, which is really just the original invoice with an ‘overdue’ stamp on it. Or you could simply re-attach the original invoice to your payment request email, with or without the overdue stamp.

3. What is a statement of accounts, and when should you send one?

A statement of accounts shows all the outstanding invoices a particular customer has with you. If someone has a few, by all means summarise them into one document or use your accounts software to generate a statement. But don’t expect it to hurry them up unless you follow with a phone call.

4. Make the dreaded phone call

Businesses that chase late payers by phone tend to get the best results. Customers can always screen your call but, once you have them on the line, it’s hard for them to ignore you. Don’t say too much. They’re the ones who need to do the talking. Just identify what’s overdue, ask when it will be paid, then wait in silence. Don’t get off the phone till they’ve told you when payment will arrive.

5. Charge a late payment fee on your invoices

You can demand more money if payment is late, but you can’t do it out of the blue. You need a late-fee policy and it must be clearly communicated up front in your payment terms. This is a great reason to get an agreement signed before supplying anything.

Identify late fees on the invoice, too. Don’t make it complicated. Some businesses quote it as a percentage but you’re better off to do the maths for your customer. Say something like:

  • Total due by 1 June: $100
  • Total due after 1 June: $110

Write (or call) to tell a customer when they’ve entered late fee territory. You could even offer to waive the fee if the customer pays right away.

6. Cut them off until outstanding invoices are paid

Why would you keep providing goods or services that you’re not getting paid for? It’s unsustainable. If a customer stops paying, stop filling their orders. And tell them what bills need to be paid before you’ll start supplying them again.

This is an aggressive move and some customers will take offence. You need to be prepared to lose the business to do this.

7. Hire a debt collector to go after your overdue invoice

Debt collectors have a skill for getting overdue invoices paid. It should cost nothing to put them on a case, but they’ll take 25% or more of the money they collect. This is likely to bring an end to your relationship with the customer so make sure you’ve exhausted all your other options.

8. Call in the lawyers

If the debt collectors don’t make any progress, then you could go all the way and hire a lawyer. The specific legal action will depend on the type of organisation you’re dealing with. It’s different for sole traders, partnerships and companies. In other words, it can get complex – so use a specialist lawyer. Your debt collector might have in-house legal expertise, or they may introduce you to a lawyer.

If your outstanding invoice stays unpaid

You have a lot of levers for getting paid, but sometimes none of them work. You may get stuck with an unpaid invoice. If that happens, you should write it off so your accounts reflect the lost income. That’s especially important if you’ve already paid tax on the income that was expected. The act of writing it off allows you to claim the tax back.

To reduce your chance of getting caught with an unpaid invoice in the future, consider doing credit checks on prospective customers before agreeing to work with them.

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Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns. Call us BEFORE Christmas on 1300 015 130.

Thanks to Xero for allowing us to share this article with you.
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Speed up payroll processing for small business

Is it time to switch to cloud based-online timesheets?

Cloud-technology is rapidly changing the way small business owners do business. It’s making previously expensive technology affordable and accessible to anyone with a mobile phone.

Now your business, no matter what size, can have a state-of-the-art, easy-to-use staff scheduling and time-recording system. It’ll save you hours of admin, improve staff engagement and help you get the most from your spend on wages. TSheets took us through some of the benefits.

Five problems with paper-based time tracking and scheduling

Paper-based systems can get the job done, but they’re far from ideal. They slow you down, introduce errors and distract people from their primary job.

  1. Paper schedules are inflexible and difficult to update
    A work schedule is right at the time you post it, but things change quickly. People take leave or call in sick and there’s no way to fill those shifts without getting on the phone and ringing around. None of your staff knows that a shift has opened up.Plus paper schedules can sometimes cause confusion for workers. In the mess of names, dates and times, it’s not unheard of for employees to mix up the dates of their shift, or confuse their starting times with someone else’s.
  2. Paper timesheets leave your business vulnerable to time theft
    Paper-based time tracking systems are prone to guesswork and the generous rounding up of hours. According to a survey from Software Advice, nearly half of all hourly workers admit to exaggerating the amount of time they work each shift.Overestimating a few minutes here or there might seem harmless, but that time adds up. A study by the American Payroll Association found that over the course of a year, time theft can cost a business up to 7% of its annual gross payroll. With a paper-based system, there’s no way for you to monitor – or address – this behaviour.
  3. Your employees hate the paperwork
    Time recording can become a job in itself. Staff members who’ve had a big day don’t like the extra administrative burden of filling out forms. And when they treat it like an unwanted chore, the data can get sloppy. The guys at TSheets have heard of uncooperative workers handing in their time on a paper cup.
  4. Small errors can have large repercussions
    Manual time tracking relies on employees writing down their hours, which you – or your payroll manager – must enter into a database. But this system can be undone by something as innocent as misreading an employee’s handwriting. A three might look like a five. A two might look like a seven. And then there are keystroke errors that sometimes happen when data is being transcribed into payroll. If a dispute arises, it can be hard to find where things went wrong.
  5. Manually processing timesheets slow down your business
    Staff often need a nudge to complete and hand in their timesheets. Then the numbers have to be punched into payroll. That double handling chews through a lot of time. It’s either a distraction to you, or it’s costing you a lot of unnecessary wages. Manual scheduling is also complex, difficult and time-consuming.

Paper-based time tracking systems are prone to guesswork and the generous rounding up of hours. Nearly half of all hourly workers admit to exaggerating the amount of time they work each shift.

The advantages of online timesheets

Smart time-tracking software won’t just give you an accurate record of hours worked, it will also give you powerful scheduling tools. All-in-one apps, like TSheets, make smart use of your employee’s mobile devices by enabling:

  • you to post staff rosters to their phones and make updates as things change
  • employees to clock on and off, and request leave, using their phone

These systems don’t require you to install any hardware and they can dramatically improve how you manage your human resources.

Real-time scheduling
A smart online timesheets package will include scheduling software that lets you publish employee rosters to their mobile phones. You can even assign jobs to individual staff members, which they receive via a phone notification. If someone needs time off, they can request it via their phone and you can advertise the open shift to the rest of your employees using the app.

Accurate mobile time tracking
Employees who use online timesheets can clock on and off with their mobile. This eliminates paperwork and guesswork. The system captures the precise start and end time so you have an accurate record of hours worked. GPS stamping shows where each employee is when they clock on and off, so you can make sure they’re actually at work.

This needn’t be seen as a tool for micro-management or surveillance. The real-time communication works both ways. Staff can easily record their breaks, submit timesheets and request leave.

Better communication with your staff
Cloud time-tracking software can alert you or your employee when their hours are approaching overtime or when a timesheet is ready for approval. With instant message alerts, you can notify your team as soon as you’ve published a new schedule or a new shift becomes available.

See where your investment is going
You can see how staff spend time by having them enter specific job and client codes into their online timesheets. This allows you to itemise your bills, or justify your invoices if they’re queried. It can also reveal if employees are getting stuck on certain tasks. The information could help you identify workflow problems that are wasting time and costing you money.

Seamless integration saves time on administration
The right online timesheets system will integrate with your other business software to automate a whole bunch of jobs you may do manually at the moment. The data can flow into your payroll system, which will calculate the tax and pay for each employee. And online timesheets can also update your accounting software, so you see how much you’re spending on wages day by day and hour by hour.

Forget manual scheduling and paper timesheets

Online timesheets with built-in scheduling functions make staff management so much simpler and far more accurate. That high-quality data becomes really valuable when you integrate it with other cloud accounting software. You’ll be able to automate payroll, and gain new insights into how efficiently your business runs. You’ll see if:

  • customers are being charged appropriately
  • internal bottlenecks are wasting staff time

Consider how this sort of convenience and knowledge could make your business faster, smarter and more profitable.

Thanks to Xero for allowing us to share this article with you.

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Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

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What makes a good cloud accounting provider?

Making the move to cloud accounting makes sense for your business, but it’s important to understand that not all cloud organisations have the same standards. Consider the ten factors in this guide to ensure you pick the best cloud accounting provider.

What is a cloud provider?

The cloud is part of the internet. For example, cloud storage simply means storing your files on a company’s server, with a secure connection over the internet to your computer, smartphone or other device.

Cloud providers are similar, but they let you run applications instead of just storing files. The advantage with cloud providers is that you don’t need to keep everything on your own machine. You can log in from any device using a browser or an app, and have instant access to your software and business data.

But the industry of cloud services is a relatively new business. Most of the smaller cloud service companies, and the cloud departments of larger organisations, are just a few years old. This can make it hard to judge which cloud service provider is right for you.

So to help you make that decision we’ve come up with 10 factors that your cloud service provider should be willing to share with you. We’re concentrating on cloud-based accounting providers in this guide, but the points covered can be applied to other types of cloud service provider too.

The advantage with cloud providers is that you don’t need to keep everything on your own machine.

1. Show that their systems are stable and robust

If you’re going to trust your financial data to someone else’s software and servers, you need to know they’re going to look after it. They will need to have the following systems in place:

Data encryption
Your data should be encrypted so that if it should fall into the hands of hackers, they won’t be able to make any use of it.

Solid security
Access to the service should only be possible through password authentication or other secure means.

Backup strategy
Hardware inevitably fails from time to time, and so does software. With a sensible backup strategy that doesn’t have to be a big problem.

Disaster recovery planning
Disaster recovery (DR) is a vital part of running a cloud business. If the unforeseen happens, such as an earthquake, cyclone or other disaster, whether natural or otherwise, the business should be able to continue with minimal interruption as servers in another location take over.

These are the basics of good cloud service delivery. If you find yourself talking to an organisation who doesn’t have all these systems in place, walk away.

2. Demonstrate that their company is financially healthy

It’s a commitment to decide to work with a cloud provider because you will rely on their service to always keep your business data accessible and up to date.

Just as if you were buying off-the-shelf accounting software to use in-house, you’ll need to know the supplier is financially healthy and able to provide ongoing support. You’ll want to make sure your hard work won’t be wasted, and that the company will be around for the foreseeable future.

So check out the company’s balance sheets, annual reports and other financial information. Talk to an accountant if you need help to make sense of the figures.

3. Make your information available across devices

A cloud service provider should be able to allow access to their application through a variety of devices and operating systems.

The more types of device that are supported, the easier it will be for you and your team to access. So look for a cloud provider or service who can ensure your information is available on:

Apple iOS devices
For iPhone and iPad users.

Android OS devices
For a wide variety of tablets and smartphones.

Windows PCs
For desktop and laptop machines, and some tablets, running Microsoft’s operating systems.

Apple Macs
For desktop and laptop machines running Apple’s operating systems.

Depending on the way your business is run, you may need support for other platforms too, such as Linux or Java.

4. Value their users and provide good support

These are difficult points to measure. However, most cloud accounting providers will have online community forums where people meet and exchange thoughts and ideas about the company.

They will also ask questions and, sometimes, make complaints. You can get an idea of how the company treats its users by reading through these forums and seeing how it responds to suggestions. Then look at how those suggestions are handled or resolved. You’ll be able to tell a lot about customer loyalty as well from these forums.

If the forum support staff are friendly, helpful and knowledgeable, the company is likely to value its customers.

5. Maintain good uptime

A broad range of features is of no use if the system keeps going offline or crashing. The amount of time a cloud service stays running and accessible is called its uptime.

The uptime percentage should be over 99.95% in the best cases: that’s less than an hour of downtime per year.

Achieving good uptime depends on various factors. These include having the right staff with the right skills, providing investment for new servers and infrastructure, and understanding the business need for reliability.

6. Have scalable infrastructure

As your business grows, you need your accounting software to be able to grow with you. Your chosen accounting product should:

Be able to scale
When it comes to processing power and data storage, the infrastructure needs to scale to meet your and their growing needs.

Preferably have their own data centre
Otherwise you’ll be dependent on another company that you don’t directly interact with.

Be open about updates and upgrades
An upgrade and update timetable can be useful, especially if it involves down time. You won’t want to lose a connection during an important client meeting.

7. Seamlessly integrate with third-party applications

You will want to be able to compare one cloud accounting provider with another, which means you’ll need to know exactly what services each one offers. Most of these providers will include that information on their website, but if not they should be able to supply it in document form for you.

But the big advantage of cloud services is that the list of features doesn’t have to stop there. Most providers will have deals with partner companies and some will also allow third-party providers to create third-party applications or ‘apps.’

This works a bit like the apps stores for smartphones, or plug-ins for web browsers. It means you can get much more out of your software. So ask for a list of third-party suppliers, partners and add-ons. In some cases there may be hundreds to choose from.

8. Provide detailed billing plans

Each provider will have a different pricing structure. Find out what they will charge as you grow your business, because your requirements will grow too.

Take a look at your existing requirements
Determine where you are today. Then you can work with your provider to forecast how things might change in the future.

Ask about their existing clients
See if they’re willing to share information about the growth of their clients who are comparable, in terms of size, to your company.

Make sure you receive a clear written schedule of costs
Then study it carefully. A low up-front initial cost might not be so appealing if the costs rise exponentially as your business grows.

Make sure any additional costs are included
For example, access to cloud accounting services should ideally be through your own internet connection. If you have to use a dedicated data connection instead, that may lead to unexpected costs.

9. Confirm that you can have your own data at any time

You might not want to be tied into one cloud provider forever. Circumstances change and businesses evolve, so you may want to switch providers at a later date.

Make sure you will be able to export your business data from their system whenever you want to, and in a file format that can be used by other software.

Don’t get tied into one organisation’s product. If your deal with them comes to an end, you need to know your business data will still be safe and accessible.

10. Get everything in writing

Once you’ve made your decision about which provider to use, make sure you get everything in writing. Good cloud organisations should have a detailed customer data check-list, indicating that they are customer-focused. The list should include items like the location and number of the data centres; the requirements each centre must comply with; emergency procedures; frequency of backups and SLAs (service level agreements).

Some of these documents will contain legal language, so get them checked with a lawyer if you have any concerns.

Now you can start working on your accounts in the cloud.

There are many advantages to working with a cloud accounting service, such as having access to the service anytime and anywhere. But it’s important to take your time and pick the right one.

When you’ve made your choice, use the ten factors we’ve listed in this guide, so you can start working on your financial data right away – day or night, from wherever you happen to be.

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Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

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(Article sourced from Xero, https://www.xero.com/au/resources/small-business-guides/cloud-accounting/cloud-provider/)

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Demystifying The End of Financial Year

Financial year-end can be a stressful time for small businesses that don’t have their bookkeeping in order. But it doesn’t have to be. Here’s what you need to get through it, and some tips on how to minimise the drama.

What is the Australian financial year?

The Australian financial year (also the Australian tax year) runs from 1 July to 30 June. At midnight on 30 June, your business books are closed for the year and you report your financial situation to the government. They use this information to figure out how much tax you owe.

Tax return due date

The tax season starts on 1 July (the day after the Australian financial year ends) and runs through till 31 October. You can submit your tax return at anytime during tax season.

In theory, this makes 31 October the final tax deadline, but there are exceptions. Businesses with tax agents have until 31 March the following year, for example. And there are other special circumstances. To find your precise due date, see what the ATO says about lodging your tax return.

Important items for Australian financial year end

To assess your business’s tax obligations, the government relies on a range of documents. The two most important are your:

  • profit and loss (P&L) statement
  • balance sheet

Profit and loss (P&L) statement

In its simplest form, a P&L statement shows your income (or revenue) in one column, and your expenses (or costs) in another. Expenses are subtracted from income to show how profitable the business is.

Creating a P&L statement can be intense because it needs to reflect all of your business transactions for the year, including:

  • every sale, markup, and fee you charged, plus interest earned
  • every dollar spent on things like supplies, rent, energy, payroll and loan repayments

P&L statements can also be complex because costs include things like depreciation of assets.

Simplifying P&L statements for end of financial year

Your accountant needs a really comprehensive and accurate record of transactions to get P&L statements right for you. You can help them by:

  • using only business bank accounts to pay business bills
  • getting online accounting software that retrieves transaction data straight from your bank
  • staying on top of bank reconciliation so income and expenses are correctly classified

Balance sheet

A balance sheet summarises your assets and liabilities. Assets are things the business owns, like worktools, vehicles, and cash in the bank. An invoice that you’ve sent but which hasn’t yet been paid is also an asset. Liabilities include debts and bills that you’ve received but haven’t yet paid.

Figuring out your assets and liabilities can be tricky if you don’t know:

  • which invoices have or haven’t been fully paid
  • exactly how much money you owe to suppliers and lenders

Simplifying your balance sheet for end of financial year

It’s best to stay on top of your assets and liabilities throughout the year, rather than trying to catch up at financial year end.

Record new assets as soon as they come into the business, so nothing’s forgotten.

Make sure you record bills as soon as they’re received (not just when you pay them).

Use invoicing software that shows what has and hasn’t been paid.

You may need to do a stocktake

Unused inventory needs to be declared as an asset. You’ll need to count what you have and assign a value to each item.

If you carry a lot of inventory, consider getting an app to keep track of it. An inventory app allows you to record inventory as you buy it. It’ll also sync with your sales system, so items are subtracted from your inventory as they’re sold. Find out what inventory management software can do for your business.

Complete your tax paperwork

Once you’ve got the numbers together, you’re ready to lodge business tax returns. You’ll have more obligations if you have employees.

For employees:

  • Produce payment summaries.
    You need to formally document the amount you paid each employee, and how much tax you paid on their behalf. Learn more about payment summaries.
  • Pay super:
    You need to make super contributions on behalf of all employees, including casual staff. Make sure you’re meeting your commitments with this ATO checklist.
  • Work out fringe benefits tax.
    Non-cash benefits that you provide to your employees (such as a car) are taxed. You must pay it on your employee’s behalf. Learn more about fringe benefits tax.

For the business:

  • Fill out a business income return.
    Declare how much profit the business earned. Do this even if you made pay-as-you-go instalment payments throughout the year. Learn more about business income returns.
  • Claim your deductions.
    Some business expenses can be deducted from your taxable income. Check out the Australian Tax Office guidelines.
  • GST (for registered businesses).
    Declare how much GST you collected and paid throughout the year. You can do an annual return, or pay quarterly and submit an annual report.

Underpaying tax can get you in legal trouble. Overpaying just doesn’t make sense. You need a lot of knowledge to get the balance right. Get a tax agent to help you but make sure they’re registered with the Tax Practitioners Board. You are personally responsible for everything that’s included in your return so it’s not worth taking a risk.

Simplifying tax

Tax is all about record-keeping. You need to account for every dollar that comes into, or goes out of your business. And you should have documents such as receipts and invoices to back up those records. Try to avoid doing this work manually as it will take a heap of time, which will make the end of financial year really stressful. Manual entry also leaves a lot of room for human error:

  • Use software to record business transactions automatically.
  • Get accounting and payroll software that calculates GST and income taxes as you go.
  • Photograph paper receipts – an app like Receipt Bank will create a digital record for you.

Health check your business

You may dread the end of financial year but there are a lot of upsides. For many businesses, it’s the only time of the year that they have a complete set of accounts, meaning they can see:

  • how much money they’re making – and where it’s coming from
  • how much money they’re spending – and where it’s going
  • where the risks are in their business

It’s an ideal time to make strategic decisions that could save money, boost revenue, and make the business more profitable. It’s also a good time to check that the business has the right legal structure, and that it’s adequately insured.

How to have a better end of financial year

For the new financial year, try to set up systems that:

  • limit the amount of work you have to do at tax time
  • give you a running report of business performance (so you don’t have to wait till this time next year to find out how you’re doing)
  • create an automatic audit trail

Online accounting software automates data entry, so your books are always up to date. That’s great for end of financial year and the tax season, but it also means you can create a P&L statement or a balance sheet whenever you like – not just at tax time. And because you’ll have digital records of everything, there’s no need to fear an audit.

Also, ask your accountant to come up with a tax plan for the new year. They’re in a much better position to lower your tax bill if they can put a 12-month strategy in place.

 

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Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

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Article source: https://www.xero.com/au/resources/small-business-guides/accounting/demystifying-end-of-financial-year/

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Effortless Submissions with Receipt Bank for Xero

If you still have receipts stuffed in your wallet, jacket pocket, or laptop bag you really need to try Receipt Bank for Xero.

Receipt Banks is a fantastic Xero app that imports your receipts and invoices into Xero.

Why not get in touch with Jac Gallagher and her team at Notch Above Bookkeeping today and learn how Receipt Bank can help you spend less time bookkeeping and more time growing your business.


Header image credit: screen shot from Receipt Bank website.

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Help! I can’t get my Xero accounts to balance out.

Xero is a powerful cloud accounting tool that has empowered many small business owners to take charge of their own finances. It’s a blessing for both business owners starting out and established businesses who rely on drawers of files and reams of paper.

Technically, you could manage your books on your own without any help. However, I don’t recommend a DIY approach.

Honestly, there have been countless times when someone desperately comes to me to surrender their Xero files due to an error they have no clue about. From my experience, this usually occurs when the client has no basic grasp of how Xero works. Most of the time, it is an easy problem to rectify.

One of the most comment questions I’m asked is “Why aren’t my accounts reconciling in Xero? I’m pretty sure I did everything right?”

And I’m going to answer that for you in an easy to follow list of all the common reasons why your accounts are not tallying.

How Xero works

I’ll briefly explain the basics of Xero accounting. On one hand, you can create business transactions in Xero. These are for items such as:

  • Spend Money: electronic payment, withdrawal, bank charges, direct debit, etc.
  • Receive Money: interest, cheque deposits, etc.
  • Transfers between accounts
  • Payroll payments

On the other hand, Xero will automatically pull in all your banks’ transactions.

The idea is to match the transactions you have created to the actual bank transactions that happen. To do this, there are many handy features in Xero that mirror real-life accounting. You can match multiple transactions to one bank transaction, reconcile part payment, undo a reconciled bank transaction if you made a mistake or delete and start over.

In order for your accounts to balance out, you need to have every single transaction matched or reconciled. Sounds straightforward, right?

However, you may find that your accounts are not balanced at times, meaning there are unreconciled transactions. You need to tackle each transaction one by one, tracing the origin and why it ended up unreconciled. Below are simple reasons why this problem may arise.

# 1. Using cheques

If you pay using cheques, you have no control over when the receiving party cashes it in. Until that is done, you may have an outstanding transaction in Xero that has no bank transaction to match.

# 2. Delay in deposits

This can occur when you record a transaction for a deposit, but the money has not arrived in your bank account. Most banks will process deposits within the same business day, but there can be delays due to cut-off processing times. This situation may also arise if using a cheque instead of an electronic payment.

# 3. Delay in online payments using credit cards

This happens when you create transactions against an invoice in Xero and payment is done online using a credit card. Everything depends on the merchant service as they have different processing times. It can take up to a week for certain merchants so make sure you understand their terms of service.

# 4. Payment not cleared

If you issue a payment, sometimes the transaction may not occur on the same day. Delays of 1-2 days is perfectly normal.

These four cases are the simplest explanation as to why you have outstanding transactions in Xero. Once you’ve figured out the root cause, you should allow a few days before seeing the bank transactions. Anything longer should be investigated.
For other cases, you could be looking at a big bookkeeping error that’s messing up your accounts, or a one-off mistake that’s easily fixed.

When you’re stuck or confused, get in touch with us, we have a good grasp of small business finance and will save a lot of time and avoid a massive headache that could keep you away from doing what you do best – running and growing your business.

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Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

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Why it’s time for small business to fall in love with remote bookkeeping

Big companies have long adopted remote working as an acceptable or even equal way of doing business.

And it can work for you too.

Handing over your bookkeeping to a remote business has tremendous benefits and with the technology that’s now available, it’s easier than ever for a small business with a limited budget.

We’re here to tell you it is possible. In fact, Notch Above has always existed as a virtual office. We’ve never had a physical office and we continue to grow each year without one. Here are three ways your small business can thrive by adopting a virtual office or remote working.

#1: Productivity tends to go up

Many studies and research have shown that employees tend to be more productive when working remotely. You’ll spend less time commuting and getting stuck in traffic. You also have the freedom to work from anywhere you choose, whether it be a breezy park or a bustling coffee shop.

The caveat here is that you need good software, technology, company policies and proper training to build a good virtual office.

We use a combination of systems in my business to communicate, collaborate and get things done. We use Skype for interaction, Dropbox for storage, GoToMeeting for group sessions and webinars, SnagIt for creating training videos and Screencast for sharing video libraries with staff and clients.

And, of course, we use the full suite of cloud-based Xero for our clients. Here’s just a few practical examples of the typical work we do…

  • Bank reconciliations can be time consuming and stressful, especially if you’ve left them to the last minute and your BAS is due! Outsourcing your reconciliations gives you more time to building your business or have more time for family and friends where you’re able to relax.
  • One of the easiest ways to develop strong business relationships is to pay your accounts on time, every time. Outsourcing your accounts payable to a remote team, means you’ll be able to build trust effortlessly. We generate a report of what’s due, you give the approval and we do the payments.

Tick, another item off your list.

  • Paying your employees on time is vital to team morale and loyalty. Working remote through cloud-based Xero, we will ensure your employees are prioritised. You receive notification on what to pay, we provide you with a bank payment file and you simply upload it to the bank and we’ll send out the payslips. It really is that simple.

Can you picture your business running this efficiently? It is absolutely achievable and we access your accounts remotely and work virtually without stepping inside your offices. Our clients love this option because we can get things done faster, better and in real-time. On top of this, we do offer onsite meetings if needed.

#2: Your employees are happier

In addition to being paid on time, a remote working policy gives your staff freedom and flexibility to work when and where they choose. By catering to their different lifestyles and growing families, you’re giving them a good work-life balance.

The biggest benefit to keeping your staff happy is that they’ll stay with you longer. Every business owner knows how valuable a good employee is to the company. A high staff churn rate is a nightmare to manage for any business owner. Losing a capable staff member means money going down the drain to hire and train a new employee.

#3: Your business can save money

A business can save on operating costs such as electricity, water, gas, office supplies and rent. By cutting on overheads, you can afford to invest in good software and technology to enable remote work.

A study by PGI found that a business can save an average of $11,000 a year for each employee if they worked remotely half of the time. Personally, I’ve saved a lot by choosing to forgo a physical office over the years. I’ve also managed to hire the right people who are dedicated and driven to serve our clients due to this.

The benefits are two-fold – it works for the business and the employees. People love being able to save time and money on petrol, public transport tickets and work clothes.

Virtual offices are the future

It’s not just a growing trend. Virtual offices are everywhere nowadays. If you’re not offering it in your business, you may be missing out on good talent who are looking for that flexibility.

And it’s not just for your staff. It also extends to your contractors and service providers, who are looking to reduce cost and commuting time. If you’ve always done bookkeeping face-to-face, try hiring a remote bookkeeper and see how much time you save and how easy the working relationship is.

Fall in love with remote working. We promise that you’ll never look back.

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Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns. Call us today on 07 3355 6041.

Personal budgeting Notch Above Bookkeeping

7 Budgeting Tips to TAKE CONTROL and Regain Financial Power

Using your business like a personal bank? 7 budgeting tips to TAKE CONTROL and regain financial power.

As a business owner, have you ever felt like you’re just not getting ahead financially, and that even when your income increases you seem to be on a treadmill of spending every cent you earn and sometimes even more?

Often, when I meet clients for the first time, and ask them how much they are spending and how much they are saving each month, they either have no idea or openly say they are saving nothing, but know they can (and should) save more.

So why is controlling our finances so difficult? It’s mainly because we don’t try!

Why not? Because it seems too hard to set up a system or put a plan in place to help us keep track of our income and our spending, and to set and stick to savings goals. But here’s the thing…. You can change your current situation, if that’s what You really want. It doesn’t have to be this way anymore.

Think about it…. How good would it feel to get your finances on track, and stop stressing about them? You’d have the life you want. You’d TAKE CONTROL…!

If you have read this far, I know this resonates with you and I’m sure you want to take action. Enough is enough right?…. Take your financial life to the next level by starting new habits and following these tips.

  1. Embrace Financial Technology to track your spending

Tracking your spending helps you understand your daily money habits so you can create new ones.

Gone are the days of having to keep all of your receipts and enter them all into a notebook or spreadsheet each month to see what you have earned, spent & saved. Having to spend ages doing this is one of the main reasons people stop budgeting.

There are now a wide variety of apps and software programs available to help you do this easily. They range from fairly simple to very comprehensive. The best of these can: link to all of your accounts (even business accounts), let you upload photos of receipts, automatically categorise your income and expenses, help you set & tracks savings goals, help manage your debts and even track your super.

  1. Review your cashflow

It helps to treat your personal finances like a business. Measure the revenue (money coming in) against costs (what is spent), and look at what you own versus what you owe.

Calculate the proportion of your income that goes to meeting your expenses, is the key here as it helps you identify the areas where you are spending more than you realised.

By simply understanding your potential to save you can make better financial decisions about investing, borrowing, cost-cutting and spending.

  1. Create a cash flow plan

By understanding the current flow of your money and then setting both spending and savings goals you can establish a cash flow plan. Once you have committed to a list of goals you will have a stronger motivation to change your money habits. Here’s an article on 5 quick tips on faster customer payments, which will help your cashflow.

Now that you have an accurate picture of your cashflow, lowering or eliminating the unnecessary expenses becomes a lot easier. Whether it’s, entertainment, food and alcohol, interest on financed purchased, or travel that are out of whack, scaling these back is the secret to creating positive cash flow.

The trick is not to waste your new found positive cashflow, but instead to save and or invest in order to maximise profits and increase wealth. If you don’t have positive cash flow, it’s nearly impossible to do this.

  1. Pay yourself first

One of the most difficult (but important) aspects of cash flow management is having the discipline to pay yourself set amounts of money for separate goals. For instance:

  • to cover your day-to-day living expenses
  • to pay down debts
  • to go towards a savings goal – home, car, holiday
  • to invest

Having all your income paid into a hub account and then setting up automatic payments into multiple accounts for each of these goals is one way to manage this.

  1. Make clearing personal debt a priority.

One of the largest obstacles to financial growth is personal debt. The problem is that personal debt, particularly credit cards and short-term financing attract high interest rates and if the principal is not repaid, the debt will quickly compound, making it your most expensive liability.

Paying off your personal debt as your first cashflow priority helps to prioritise your other expenses. By forming this habit, you will become debt-free sooner. 

  1. Invest 

Once you’ve implemented a cashflow plan that has reduced your expenses, established some saving and eliminated personal debt, it’s time to consider investing into assets that will help you grow your wealth for years to come.

There are a range of ways to invest your hard-earned money: real estate, direct shares, managed investments, superannuation and venture capital. Do extensive research, ask questions and choose the investment types where you feel most comfortable investing.

  1. Seek advice from experts.

Develop a habit of seeking advice to help you plan and test out major financial decisions. This can help you avoid making costly mistakes that you’ll end up regretting. When seeking financial advice, make sure you seek it from qualified experienced advisers who are able to provide strategic advice, not just sell you a product. This way you’ll be less likely to take financial risks that could hurt your lifestyle.

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Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support.  Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.  

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Budgeting Notch Above Bookkeeping Brisbane

Personal Budgeting & Avoiding Future Tax Troubles

Using your business like a personal bank? 3 red flags and how to fix them

After a good long break, I’d like to start 2018 by talking about personal budgeting. Although I deal with business finances, I can tell you that your personal budget is inextricably linked to your company’s success.

I’ve seen it happen many times in my line of work.

Time and time again, business owners make good profit and then commit the fatal mistake of spending more than what they earn. They run into tax problems with the ATO as they can’t pay their GST, PAYG and superannuation obligations. If left unchecked, it will spiral out of control until their business falls into financial ruin and their personal life in distress.

Red Flag #1: Treating the business like your personal wallet

The first common red flag is when you consistently have a debit balance loan account in your business, or what the ATO calls division 7A loan. This can happen when a business owner or shareholder, takes out money from the company for themselves without declaring it as a salary or bonus. Essentially, this amount is treated as a loan from the company to you if unpaid within a year, so your business will have a debit balance loan.

However, the ATO’s rule on division 7A loan treats this amount as “dividend” for the person who drew the money. This means you will have to pay personal tax on the amount at the end of the fiscal year. Therefore, you shouldn’t treat your business like a personal bank because you can’t run away from paying taxes.

Red Flag #2: Always scrambling to pay your debts

The second red flag is when you’re constantly struggling to pay all your bills and tax obligations. It’s the stuff of nightmares for business owners to get slapped with a huge tax bill. If you’re always using credit to pay the ATO or your personal expenses, then you will eventually run out of resources for money.

Red Flag #3: Your savings are depleting

Having a substantial amount in savings is important to your personal wellbeing. If you’re constantly breaking your piggy bank or have zero amount allocated for savings, then you need a huge reality check.

In part B to this article Craig Buntain from CFL Financial Planning explains how to take control of this situation and regain the financial power.

Free Bookkeeping Systems Check-Up

Take our quick quiz to find out how to get more cash and time back in your life.
Start the Quiz

 

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support.  Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.  

Like us now on Facebook

Follow us now on Twitter

Connect with me on LinkedIn

Visit our Website