If you find it hard keeping your book-keeping up to date, you might find these basic tips helpful.
Keeping track of which money belongs to you and which belongs to the Tax Office is really important whether or not you are GST-registered. When payments from clients come into my bank account, I immediately transfer the approximate PAYG and exact GST amounts owed to the Tax Office, from those earnings, into another account so I don't accidentally spend money that's not mine.
During the month I keep a folder where I throw the receipts for my business expense, and another folder of invoices sent out. I diarise in my electronic diary (MS Outlook), to go through my bank statement at the end of each month, documenting the month's expenses and earnings in Reckon and complete the bank reconciliation so my book-keeping is up-to-date.
However, in practice, I generally put off that diary alert once or twice or even more times, and don't complete my monthly book-keeping until half-way through the following month. Sometimes I'm so busy juggling jobs that when the quarter has ended and it's time to complete my BAS, I haven't even started to balance my books for the quarter.
One of the few upsides to being GST-registered is that you have no choice but to get up-to-date with your book-keeping at least every three months.
If you are not GST-registered, you don't have the BAS requirements breathing over your shoulder. So it's even more important that you're disciplined enough to keep your book-keeping reasonably up-to-date. Don't get more than three months behind or you're asking for problems.
Book-keeping is a bit like washing the dishes, or housework. In the long run it's easier to just do the dishes regularly rather than put it off and watching the dirty plates mount up. Imagine if you kept putting it off and ended up having to do 12 months' book-keeping all in one go at the end of the financial year? That wouldn't be pretty.
When you're managing a small business, you should try to succeed in keeping on top of your book-keeping. However, if you're anything like me you will put your clients' needs before your own and you will sometimes get behind in your book-keeping.
Don't beat yourself up about it when you do. Just catch up and move on. Because running a business is like a dance: two steps forward, one step back. If you keep going in the right direction, you'll get there in the end.
Photo: Sally Mitchell.
This article is based on my own experiences since starting On Time Typing as a small online/onsite scribing business in 2002 which is now an online scribing, writing, editing and proofreading business.
Stay posted for future articles about managing online businesses, working from home and work-life balance.