For a new and growing business, Accounting and Bookkeeping Services Melbourne may not be the most exciting topic for owners, however, good accounting is what will keep the business alive and ready for what lies ahead.
No business can survive without a strong accounting team, and making the right decisions from the start, as owner or manager, will set the business up for success. Here are common decisions new Accounting and Bookkeeping Services Melbourne and growing businesses must make.
Track Revenues and Expenses
This may seem obvious, but businesses must have a consistent way of tracking income and expenses. With current software solutions, it is better not to bother with manual processes and to adopt accounting software from scratch that will provide fast, easy, and accurate data tracking.
Software that offers comprehensive accounts payable (AP) and accounts receivable (AR) processes will give business owners confidence in receiving funds and paying bills on time.
Track Assets, Liabilities, and Capital
Creating and maintaining balance sheets and other financial reports is important for Accounting and Bookkeeping Services Melbourne business. It keeps assets, liabilities, and capital under control. Assets represent what a company owns, such as cash, inventory, and equipment, while liabilities represent things the company owes, such as loans or other debts.
With the right software, cash flow statements can be easily created to monitor the cash inflows and outflows of a business. This will give the owners a clear picture of how the money is being spent and at what rate it is being received.
Budget is a very important aspect of a new or existing business. Making plans and identifying opportunities that will keep the business going, as well as accelerate growth, all go into the budgeting process. In addition to creating an initial budget, the budget should be adjusted and referenced against forecasts frequently. A useful technique for finance teams is to use forecasts throughout the year.
Companies that visit their planned budgets regularly throughout the year to check in and compare them, and how much they have budgeted, each time the budget for the next year. Allow for easy tracking and process. Graded forecasts typically extend 6-12 months into the future to give companies the ability to better allocate resources and prepare for any disruptions.
Choose the Accrual Basis or the Cash Based Accounting Method
Every business must choose an accounting method from the start. Companies must choose between accounting on a cash or accrual basis. Most companies deal with accrual accounting. The main difference between cash-based accounting and accrual-based accounting lies in the timing of recognizing expenses and revenues.
The cash approach recognizes expenses and revenues more quickly than the accrual method. The accrual method focuses more on expected expenses and revenues. Cash-based accounting focuses on recording transactions when cash changes hands, which means it is easier to perform.
Hire a House Bookkeeping Team or Outsource
Not every business owner specializes in accounting, nor does it have to be. However, a startup or business going through a period of growth will reach a point where the bookkeeping must be managed by an accountant to stay current and accurate. At the end of the day, it is the Accounting and Bookkeeping Services Melbourne functions of a business that ensure that business owners have the information they need to make business decisions.
This is why hiring a full-time accountant is a worthwhile investment for a new or existing company. There are a few options when it comes to hiring an accountant. A full-time employee of the company, external personal accountant, and external virtual accountant. Both personal options have advantages – being personal.
Complete Management of Business
However, these options often cost more and lack the flexibility and scalability that an offshore virtual service provider can typically offer. An outsourcing service provider such as Numbers pro provides a complete management takeover that handles all the bookkeeping of the business to ensure efficient and accurate bookkeeping and reporting and more.
In addition, as a startup (or existing) company grows, there are unlimited options for eliminating the need to hire more people in the office, training, etc.
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