Big Tips for Small Businesses with Xero

Bookkeeping for Small Businesses - Tips for Thriving

Small businesses have to get their bookkeeping right and first time. Here's the best tips I can give you after working in businesses for 2 decades.

Get efficient at paperwork, so you can spend more time on the job

More time spent doing the work means you can make more money.

So outsource everything you can to others.

That includes your marketing work, admin, and ESPECIALLY your invoicing and bookkeeping.

Nobody started in business because they love bookkeeping – they love their trade

Separate your personal and work bank accounts

Initially, it’s a pain in the butt to set things up properly. But it’s worth it – because it saves you so much time and so much money at tax time.

Know what your breakeven formula is for every:

-         Year

-         Month

-         Week

If you don’t know how to calculate that, then get in touch and I’ll happily show you how.

Cashflow:

You’ll need to know that there is money in the account when you need it. That way you don’t get nasty surprises.

Good cashflow management protects you with things like:

-         setting aside money for your BAS (quarterly)

-         know when you can take money out of your business and when you need to keep it in there

-         setting aside money for big capital expenses

If you get financially stuck:

Every small business has times when they are strapped for cash. The easy 3 options are:

-         chasing overdues

-         talking to the ATO about delaying your BAS/PAYG

-         talking to your suppliers

Do not treat your business like an ATM.

Do not treat your business like an ATM. Keep more money in your account than you think you'll need.

And don’t let your partner do that either.

Have more than enough in all your work accounts.

Invoicing Immediately:

-         Make your invoicing look eye-catching and attractive.

-         You can allow people to pay straight from the invoice – which is great.

-         You can do that through Xero or Servicemate or equivalent.

-         Invoicing customers should be done every single day – by you or your bookkeeper:

it tells people you are serious about getting paid on time -

then you need to follow-up after 7 days.

Overdues - Get serious or get stuffed around

Tracking your overdues is so important

-         send out invoices the same day you do your work.

-         Once overdue - the first 7 days of being overdue – jump on those texts and phone calls. It’s important for getting paid.

Payroll

-         People get very stuck - just get some expert help because it’s not worth the fines if you make errors.

-         Use an ABA file to pay all staff at once – takes 3 mins.

-         Let Xero handle your PAYG calculations.

-         Pay super on time – consequences are off-the-scale if you don’t.

Use Xero - not a spreadsheet, not something else.

Nobody would take bad tools to work and expect to do a good job. It’s the same with your bookkeeping. You don’t need a pretty phone app. You don’t need an Excel file done by a relative. You need the job done correctly the first time. Use Xero.

Do not DIY your bookkeeping.

Just don’t.

It’s bad for family.

Bad for making financial choices.

It costs more when your accountant has to fix errors and undo things.

It’s like putting the apprentice in charge of your biggest job. They might survive but don’t risk it.

Get in touch with us - we'll help -

If you need a hand to get set up, reach out to us and we’ll help you out. Free initial 20 min consultation – on Zoom or phone.