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It's easy to get out of your depth with your bookkeeping: Part One

Updated: Jul 16


Things to Check Weekly, Monthly and End of Financial Year


You’ve created a product that you’re proud of, you’re spending late nights working on your sales pitch and quotes, and then there is the marketing! You’re probably not lying awake at night wondering “are my books balanced or did I lodge that form on time?”


Bookkeeping is not as urgent, as say, finding new clients, trying to win that quote, or wondering if you can really afford to take someone on to expand. But that doesn’t mean that it isn’t foundational to the health of your business. Plus – how do you know if you can afford another salary without great cash flow management, budgets, and reporting?


If you’re the owner of a business and focusing on growing a profitable business, it’s easy to get out of your depth with your bookkeeping and lose track of thoroughly knowing your numbers to make quality decisions – on profitability, growth, staff, budgets, and compliance. And if you are trying to get a business loan, grants, or assistance, you’ll need clear and up to date financials so that you, and investors, can make informed decisions for your future success.


Here are some things to consider with your bookkeeping. Whilst we recommend you seek quality advice from your Accountant on business structures, the treatment of your bookkeeping entries and how you are taxed, how you can pay yourself, and how to treat drawings and how you generate reports depends on ensuring these things are correct:


Business Entity Setup and Chart of Accounts: Each business entity requires a different setup, Chart of Accounts, how you can pay yourself, how you record drawings and wages, and how you are taxed, and more. Ensuring this is set up correctly is essential. There five main types of business entities:

  • Sole proprietorship

  • Partnership

  • A Company;

  • A Trust

  • A Not-for-profit.


Cash or Accrual Accounting:

Accrual Accounting is more complicated than Cash Accounting, so you’ll need an in-depth understanding of bookkeeping methods, or a professional to help you out.

Cash accounting tracks the actual money coming in and out of your business. With cash accounting, when you get an invoice for something, you don’t get to claim the GST or expense until you’ve paid the invoice, nor do you pay GST on an invoice nor record the income until the client has paid you.

Cash accounting is a simple system that keeps track of your business cash flow and suits smaller businesses if you have mostly cash transactions. It is great to give you a picture of how much money you have in cash and your bank accounts. Ensuring you generate ‘Cash Reporting’ for your profit and loss, balance sheet, BAS, and more is crucial, as is keeping an eye on your Accounts Payable and Accounts Receivable. This is one area that can causes confusion and gives inaccurate pictures of your business profits if done incorrectly.

Accrual Accounting is where you record expenses and sales when they take place, instead of when cash changes hands. This way of accounting in your books shows the amounts you owe to people and the amounts owing to you. For example, if you are a builder and send an invoice for a project you are about to start, you record the sale in your books and account for the GST even though you haven’t been paid yet. Conversely, when you buy items on terms or account, you record the purchase in your books as an expense and receive the input tax credit, even though you have not paid your supplier.

Accrual Accounting generally suits businesses that don’t get paid straight away (for example, architects who provide a service then invoice for it later). Using this method in your bookkeeping tracks your true financial position, and particularly where there are large value transactions or lots of contracts is crucial to tracking your liabilities and assets.

Accounts Receivable and Accounts Payable:

Accounts Receivable and Accounts payable play a big role in your cash-flow, and yet for many businesses, late payers have become the norm. In fact, small-medium businesses (SMB) are routinely paid 18 days late for goods or services, while 1 in 6 of their invoices remains unpaid after a period of 90 days. Having so much cash languishing on your Balance Sheets can prove challenging, as it leaves businesses without enough capital to pay taxes, staff, reduce debt, or invest in growth. As a result, an effective Accounts Receivable bookkeeping process flow can have a seriously beneficial effect on the financial health of your business.

By the same token, it’s incredibly important to properly manage your Accounts Payable bookkeeping. Without a full understanding of who and what your business owes, there’s no real way to determine the financial health of your business with any degree of accuracy. Missing payments can lead to late payment interest or penalties, damaged relationships with suppliers. Too many current liabilities on your Balance Sheet could result in significant cash flow problems.

Overall, optimising your Accounts Payable and Accounts Receivable processes and procedures is a great way to improve your business’s cash flow and financial health – and your mental health!

Tasks, BAS, Reconciling and Lodging:

Before filing your BAS returns, you’ll need to ensure you have generated the correct reporting to suit the accounting method applicable to your business, ensure your accounts are reconciled and your bookkeeping is up to date.

One thing you want to avoid is only cracking open your business’s books when you’re forced to—such as at tax time, when courting a new investor or when there are problems.


Here’s a bookkeeper-recommended checklist for essential weekly or monthly tasks:

  • Pay staff accurately and on time. They are the lifeblood of your business and a happy team member is an asset to your business;

  • Enter transactions weekly or monthly into your bookkeeping software (depending on volume);

  • Code items correctly (was that Officeworks visit for stationery or a computer?);

  • Reconcile your bank accounts

  • Check GST on local and overseas transactions and code correctly;

  • Ensure you have a document to match each transaction (we recommend electronic filing). If you lose them you might not be able to provide certain verifications if you get audited;

  • Enter in all supplier invoices to be paid and code correctly;

  • If your bookkeeping software is online, ensure you enter cash transactions;

  • Reconcile your bank accounts (this step is vital);

  • Prepare and send invoices regularly – the quicker you invoice the quicker you are paid;

  • Send statements once you have reconciled, if you run accounts;

  • Reconcile your Accounts Payable against supplier statements (yes they do make mistakes);

  • Ensure correct terms on Supplier invoices are entered so the due date is clear in reporting so you don’t risk late payments;

  • Pay Vendors and other bills on time so you do not affect your business credit score;

  • Review overdue invoices and followup;

  • Review how much cash you have in the bank, how much cash is coming in and expected to go out and make operating, growth or other purchase decisions based on facts;

  • Review your financials, including your Profit and Loss Accounts, Balance Sheet, Accounts Receivable, and Accounts Payable, and keep an eye on trends and comparisons to other periods of time to see how you are going. Catching things early often saves a business.


Some additional yearly or end of year tasks you need to do as a business owner may include:-

  • Keep up to date with tax laws, deductions, concessions, and changes;

  • Conduct a stocktake and make inventory adjustment journals;

  • Reconcile your debtors and creditors;

  • Finalise income statements for single touch payroll and lodge returns for PAYG withholding;

  • Reconcile superannuation, lodge returns and make payments;

  • Reconcile logbooks for vehicle deductions;

  • Reconcile GST against the General Ledger, Profit and Loss and Balance Sheets;

  • Review your finances and financial reports;

  • Prepare budgets for the upcoming year, compare against targets and create a cash flow forecast;

  • Set goals and priorities, assess whether your strategies are working;

  • Review your taxes, differences in different structures, and review your business structure;

  • Report to governing bodies (ie QBCC);

  • Check and estimate the upcoming year’s insurance coverage where turnover is required;

  • Backup and secure your files (registrations, financial information, customer data);

  • Collate records of asset purchases or capital expenditure for deductions or capital gains tax.


Whew! For us, it’s like a walk in the park on a Sunday, and when you engage a professional bookkeeper, you can focus on what you do best. Making money from what you love and are great at!


BalanceWell Bookkeeping specialises in giving you back balance in your life and confidence in your decisions with great bookkeeping. If you would like a confidential discussion, or free data health check, please get in touch today and let us help you.

For more information, please contact Judy on 0431 103 257 or email at judy@balancewell.com.au to arrange an appointment.

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