13. Bookkeeping and money-management process

What is bookkeeping?

Bookkeeping is recording, categorising and checking every business transaction so the company records match documents and bank statement

What bookkeeping steps should bug stomp do when money is received from customers

Make sure:

• The Invoice has been saved and recorded

• The customer payment has been recorded

• The Invoice has been marked as paid

• A receipt or payment confirmation has been provided

• The income has been placed into the correct category

• The payment has been matched to the bank deposit

• Any unpaid invoices is recorded as account receivable and followed up

What bookkeeping steps should bug stomp do when money is spent by Bug Stomp

Make sure

• The receipt or tax invoice has been saved

• The expense has been placed in the correct category

• The payment has been matched to the bank transaction

• An unpaid supplier bill is recorded as accounts payable until paid

• A company expense paid personally is recorded as an expense reimbursement

How should company money be separated?

Company money should be kept separate from personal money and can be divided into separate accounts for different purposes:

• Operating account

• Company tax reserve account

• GST reserve account

What is an operating account

The main business bank account used to receive customer payments and pay normal business expenses.

What is a company tax reserve account?

A separate account used to set aside money for company income tax and PAYG instalments.

What is a GST reserve account?

A separate account used to set aside GST collected from customers so money is available when BAS payments are due.

What is a good Bookkeeping workflow to get into

Weekly: Reconcile the bank account and check unpaid customers invoices and supplier bills
Monthly: Review the P & L, cash flow and budget
Quarterly: Check Tax and GST reserves and lodge Bas if GST registered

Annually: Lodge the company tax return and organise the companies records

How long do records have to be kept for

tax records have to be kept for at least 5 years and

company financial records for at least 7 years