Foreword xi
Introduction 1
About This Book 1
Foolish Assumptions 2
Icons Used in This Book 2
Where to Go from Here 3
Chapter 1: Getting Started 5
Deciding What Software to Use 6
Designing a System to Fit You 6
Getting organised 6
Keeping track of expenses and supplier bills 7
Recording money in 8
Getting Technical 8
Understanding GST 8
Working with payroll 9
Reconcile often, reconcile well 10
Developing an Attitude 10
Convince yourself this stuff matters 11
Quit counting sheep 11
Do your job well 12
Getting Skilled Up 12
Keeping your qualifications up to date 13
Joining an association 13
Signing up to a course 13
Chapter 2: Working with Accounting Software 15
Getting into Gear 15
Laying essential foundations 16
Understanding basic terms 16
Working in the cloud 17
Matching Software to the Job in Hand 18
Starting up a new business 19
Getting ready to grow 19
Making stuff and buying stuff 20
Catering for bigger business or non-profits 21
Chapter 3: Building Your Accounts 23
Classifying Accounts 24
Building Your Profit & Loss Accounts 24
Analysing income streams 25
Separating cost of sales accounts 25
Cataloguing expenses 26
Dealing with personal expenses 28
Seeing Where the Money’s Made 29
Itemising Balance Sheet Accounts 30
Adding up the assets 31
Listing liabilities 33
Accounting for equity 34
Your Final Chart of Accounts 35
Chapter 4: Creating Order Out of Chaos 37
Devising a Recordkeeping System 38
Getting your hands on the right info 38
Receiving bills electronically 40
Filing stuff so you can find it again 40
Developing a Bookkeeping Calendar 41
Keeping track of deadlines 41
Deciding what to keep and how long for 43
Helping Others to Help You 44
Chapter 5: Recording Expenses and Supplier Payments 45
Working with a Micro Business 46
Automating data entry with bank feeds 47
Entering transactions one by one 48
Recording Expenses for a Small Business 50
Deciding whether to record supplier bills 52
Bookkeeping for a Larger Business 53
Managing supplier orders and invoices 53
Making supplier payments 55
Dealing with EFTPOS and credit card transactions 56
Allocating Everything Correctly 56
Selecting the right account 56
Getting things right: five top tips 59
Chapter 6: Recording Receipts and Sales 61
Keeping Track of Sales and Payments 62
Recording customer sales 62
Entering customer payments 64
Working on a Cash Basis 66
Bookkeeping for Other Kinds of Income 68
Recording miscellaneous receipts 68
Dazzling everyone with your brilliance 69
Bringing Home the Bacon 70
Chapter 7: Understanding GST 73
Coughing Up the Difference 74
Picking a reporting method 74
Reporting for duty 75
Calculating GST 76
Figuring What’s Taxed and What’s Not 77
Move it, groove it, tax it 77
Transactions with no GST 78
Understanding Tax Codes 79
Creating a list of tax codes 80
Linking accounts to tax codes 81
Staying Out of Trouble 82
Avoiding traps for the unwary 82
Keeping personal matters separate 83
Completing Your Business Activity Statement 84
Playing in form 84
Meeting your deadlines 85
Chapter 8: Paying Employees 87
Hiring a New Employee 87
Step One: Complete a tax file declaration 88
Step Two: Supply a Fair Work Statement 89
Step Three: Cover against mishaps 89
Step Four: Subscribe to super 89
Step Five: Ensure your software is up to speed 91
Checking Minimum Pay and Conditions 91
Getting to Pay Day 93
Paying folks their dues 93
Checking timesheets are accurate 96
Taxing pay (no mercy shown) 96
Dealing with deductions 98
Calculating superannuation 98
Submitting to Single Touch Payroll 100
Taking Leave 101
Calculating leave on a percentage basis 101
Calculating hours per pay period 102
Paying Tax and Super 104
Reporting and paying PAYG tax 104
Paying superannuation 105
Watch out for payroll tax 105
Establishing a Schedule 106
Chapter 9: Reconciling Accounts 109
Getting Started 110
Deciding what bank accounts to reconcile 110
Calculating your true bank balance 110
Recording your opening bank balance using accounting software 112
Doing Your First Reconciliation 113
Reconciling accounts when you’re not using bank feeds 114
Reconciling accounts when you have bank feeds 116
Keeping Proof that You’ve Done the Deed 117
Troubleshooting Tricks 118
Balancing Other Kinds of Accounts 120
Chapter 10: Understanding Financial Reports 121
Cash versus Accrual — What’s the Difference? 122
Telling the Story with Profit & Loss 123
Putting income under the microscope 124
Weighing up gross profit 125
Watching expenses, dollar for dollar 125
Painting a Picture with the Balance Sheet 126
Sketching assets, black as ink 127
Drawing liabilities, red as blood 128
Sculpting equity, cast in gold 129
Understanding the Relationship between Profit and Cash 130
Why there’s profit but no cash 130
Why there’s cash but no profit 131
Scrutinising Results 132
Chapter 11: Starting a New Financial Year 135
Finalising the Old Year 136
Out with the old year… in with the new 136
Generating end-of-year reports 138
Protecting against accidents 139
Communicating with Your Accountant 140
Sharing your accounting data 140
Matching the accountant’s figures against your own 141
Bridging the communication gap 142
Starting a New Year 143
Understanding what happens when you start a new year 143
Archiving data 144
Chapter 12: Ten (Or More) Tips for Contract Bookkeepers 145
Register as a BAS Agent 146
Get Skilled Up 147
Cover Yourself with Insurance 147
Join a Professional Association 148
Act Honestly and Independently 148
Avoid Conflicts of Interest 149
Behave Professionally 151
Take Reasonable Care 152
Write an Engagement Letter 154
Know Your Limits 155
Protect Client Data 156
Chapter 13: Ten (Actually Seven) Tips for Speed 157
Get Connected with Bank Feeds 157
Create Bank Rules to Allocate Transactions Automatically 158
Create Recurring Transactions 159
Integrate Everything 160
Keep Personal Stuff Separate 160
Set Up Your Accounting Software Properly 161
Make Customer Payments Easy 161
Index 163
