How Profit First Can Help Businesses Increase Profits

Profit First

Starting out as a business owner can be a tough decision. It can also potentially be a very difficult path. You must find ways to expand your business, because competition is everywhere. But how can you do this when you’re already stretched thin with revenues? This is where the Profit First method comes into play.

What is Profit First

Profit First is a revolutionary accounting system that takes money out of your business to pay yourself first. It’s an easy-to-understand system that helps you maximize profits, pay yourself faster and improve cash flow.

It’s simple but it works!

This simple system forces you to spend less than the revenue coming into your business so that there is always enough money left over to pay yourself first. By paying yourself first, you will become less reliant on income from your business and have more financial freedom.

How to implement Profit First

A lot of people are familiar with the idea of Profit First and how it can help businesses become more profitable. But how do you actually implement it?

Here are some tips to help you get started:

TIP 1 : Come up with a personal minimum cash flow target.

This is the amount of money you want to see coming into the business each month before expenses are paid. For example, if you need $1,000 per month in cash flow before paying yourself, then that’s your target number.

TIP 2: Calculate what percentage of your monthly revenue goes toward paying yourself as an owner or partner.

This is called owner take-home pay and is typically around 20 percent for small businesses and up to 50 percent for larger companies (depending on how much money needs to be invested back into the business). As an example, if your monthly revenue is $10,000 per month, then 20 percent would be $2,000 per month and 50 percent would be $5,000 per month.

TIP 3: Subtract your personal minimum cash flow target from your owner take-home pay amount (step 2).

The remaining amount will be left over as profit that can be used for reinvestment into your business or distributed among partners/owners (including yourself)

Profit First works for all businesses

Whether you’re a startup or a multi-million dollar business, Profit First can help you. The reason is simple: Profit First forces you to be more intentional about how you spend money.

It’s easy to spend money if you don’t see it coming out of your bank account every day. You might not even realize how much you’re spending on things like coffee, lunches and snacks when they aren’t taken out of your paycheck every week.

With Profit First, it’s impossible to ignore where your money is going because the system requires that you transfer a set amount into your savings account at the end of each week. This means that any time you spend money outside of this transfer (on anything), you’re literally taking money out of savings and putting it back into your checking account — making it impossible for you not to see what’s happening with your finances on a daily basis.

Why is Profit First necessary?

A business owner may think that the best way to increase profits is by increasing revenue. This makes sense because it’s always easier to make a profit when you have more money coming in than going out. In fact, this is one of the reasons why so many businesses fail. They make the mistake of focusing on revenue but not expenses.

Think about it this way: if you had no expenses at all, you would have unlimited profits! But unfortunately, most businesses do have expenses so they have to focus on them instead.

The problem with focusing on revenue first is that it can lead us down a slippery slope towards financial ruin if we aren’t careful.

For example, let’s say that sales are down for the year and your expenses are higher than expected due to increased utility costs or payroll taxes. You might decide to take on more debt or cut salaries in order to cover these costs which will only make things worse from an overall profit standpoint because now both revenues and expenses are lower than expected or budgeted for for that year – or perhaps even worse – there will be no profits at all!

Who can benefit from using the Profit First Method?

The Profit First Method is a system that can work for any business, regardless of its size or industry. It works for service-based businesses and product-based businesses alike. It works for brick-and-mortar businesses, online businesses and mobile businesses. It works for companies with one location or multiple locations.

If you have employees, Profit First can help you manage their payroll more efficiently. If you’re an entrepreneur working alone, it will help you manage your own finances more efficiently as well.

It’s easy to see how this tool could be useful for any business owner who wants to take control over their money management practices.

Takeaway

Profit First has a lot of aspects to it, and it’s definitely a lot to take in at first. It’s a whole new philosophy that’s based on ideas you might not be used to thinking about (let alone putting into practice).

But if business owner like you is determined to change financial outlook for the better, implementing Profit First can help make more money by investing in what matters most.

If you need further help, we offer a free 1:1 Profit First consultation. You can either contact us or schedule your appointment today using this link: https://bit.ly/3hHHb2P

Planning To Retire? Consider this!

Retire

You’ve worked hard for a long time, and are planning to retire soon. Did you know that there are various things to consider? What are the things you should know before retiring?

Check if you can access your super

You can access your super at any time after you reach preservation age. This is the age at which you have to wait before you can withdraw or roll over your super.

Please note that the basis of your preservation age lies to your date of birth.. See below preservation age per the ATO

If your date of birth is:

Before 1 July 1960
then your preservation age is 55

1 July 1960 – 30 June 1961
then your preservation age is 56

1 July 1961 – 30 June 1962
then your preservation age is 57

1 July 1962 – 30 June 1963
then your preservation age is 58

1 July 1963 – 30 June 1964
then your preservation age is 59

From 1 July 1964
then your preservation age is 60

You can also access your super when you reach the age of 65 or if you are eligible under the transition to retirement while working.

Check if you can reduce your hours and still earn the same

If you’re planning to retire, you may be wondering how you can reduce your working hours without reducing your income.

Per the ATO, the transition to retirement rules allow you to reduce your working hours without reducing your income. To do this, you can choose to start a transition to retirement income stream (TRIS). 

You can only access your super benefits as a ‘non-commutable’ income stream. This generally means that you can’t take your benefits as a lump sum cash payment while you are still working.

For more details about this, please visit the ATO website using this link: https://bit.ly/3N9LmTq

Check approved early retirement scheme

A tax-free early retirement scheme is one in which an employer encourages certain groups or classes of employees to retire early by making payments that are tax-free to a limit. The employer must apply for and receive approval from the Australian Taxation Office before payments under the scheme can start.

For more details about this, please visit the ATO website using this link: https://bit.ly/3lTLs5w

Takeaway

Whether you’re planning to retire or moving on from working life, it’s important that you know the basics of superannuation and how it affects your tax and exit strategy. The points outlined above should hopefully point you in the right direction, but you should always take professional advice for a final ruling.

If you need a professional advise, please contact us at admin@profit1st.com.au, or visit our contact us page.

References: https://www.ato.gov.au/Individuals/Jobs-and-employment-types/working-as-an-employee/leaving-the-workforce/

If you leave your job, how will your tax/es be affected?

tax implications

You may be wondering how your tax or taxes will be affected if you leave your job.

If you’ve decided to leave your job and are looking for another one, it’s important to understand how the ATO will treat your superannuation and taxes when you move on.

What are the things to put in consideration?

Your tax will be calculated based on your income and circumstances. If you leave your job, there are various ways to make sure that the ATO doesn’t charge you too much or too little tax.

You’ll need to work out whether you have a tax debt or overpayment, and how much extra money you will owe or be refunded by the ATO.

If you’re leaving your job and getting paid as usual, but with no pay for leave taken yet, then you can claim this as a deduction for the tax year in which it was earned. You can also claim any unclaimed leave payments from previous years on your tax return.

If you’re taking an early retirement package then your employer may have made deductions from your pay during the year.

These deductions can be claimed as a deduction from income on your tax return if they were paid under an approved superannuation scheme that provides benefits.

If not, they can’t be claimed as a deduction unless they’re specifically related to superannuation benefits payable under an approved super fund’s governing rules, in which case they may be included.

Income: What if I do or I don’t have an income for that year? Am I liable for tax?

If you leave your job and have not had any income for that year, then you are not liable for tax. If you have had income but it does not exceed the tax free threshold or if your employer has withheld enough money from your salary to cover any tax payable, then no further action is required.\

However, if your employer did not withhold enough money to cover your tax liability or if you have earned more than the tax free threshold then you will need to lodge a tax return with the ATO. You can do this online or over the phone by calling 13 28 61 (13 10 28). You can also reach out to us for help via the following:

Contact Us Via Our Website
Contact Us Via Email
03 5979 2671

Superannuation

If you’re leaving an employer, or retiring, you’ll probably be making some changes to your superannuation contributions and benefits. You might also be thinking about the best way to get access to your super savings.

If you have a choice of super funds and can move your account, check the fees charged by each fund. You may also want to consider whether it would be better to consolidate accounts with different providers into one account run by a single provider.

What are the tax/es that you may pay?

If you leave your job, you may have to pay taxes.

Payment Summary

Your employer will issue you with a payment summary. This document will show the amount of income tax and Medicare levy you paid during the financial year.

If your employer doesn’t issue this statement, or if the amount shown is incorrect by $50 or more, contact them immediately. If they won’t correct their mistake, you need to contact the ATO for steps that you need to take.

Final Tax Return

When leaving employment, you should submit your final tax return as soon as possible after 30 June (or before 30 September if you were overseas for more than three months). You may also need to lodge an amended tax return for any previous years that are open for assessment under normal circumstances .

Notice of Assessment

You may receive a Notice of Assessment or amended Notice of Assessment from the ATO before or after receiving your payment summary from your employer. Make sure that any additional tax payable is paid directly to the ATO, not your employer!

Takeaway

If you’re thinking of leaving your job soon, you’ll want to take a few factors into consideration before deciding on your course of action. By doing this, you’ll know exactly what to expect when it comes to both taxation and superannuation.

For more details about this, you can check the ATO website at www.ato.gov.au

Moreover, your best bet is likely to consult with a financial adviser that’s familiar with the ATO’s complex system.

You can reach out to us for help via the following:

www.profit1st.com.au
admin@profit1st.com.au
03 5979 2671

What You Need to Know About Declaring Investment Income?

You have to declare your income from investments no matter if you get paid directly, or through a distribution. The list of investment income specified by the ATO are the following:

  • Interest you earned
  • Dividend Income
  • Rental Income
  • Income or credits you received from any Trust Investments
  • Capital Gains

What is investment income?

Investment income is defined as the money you make from investments. It can include the interest and dividends from bonds, stocks, and other investment products, or gains from selling those investments.

The amount of income you earn is based on how much you have invested and how long you have invested it. Just think about when you invest $100 in a savings account earning 2% interest per year, at the end of the first year you would earn $2 in investment income.

Interest You Earned

As an Australian resident, you must declare any interest generated by your bank accounts as income on your tax return. This includes:

  • Interest earned from financial institution accounts and term deposits
  • Interest earned from any other source, including penalty interest received as a result of an investment
  • Interest you earn from a children’s savings account that is opened or operated by you and the money in the account is yours
  • Interest paid or credited to you by the ATO: for example, interest on early payments, interest on overpayments and delayed refunds
  • Life insurance bonuses (you may be eligible for a tax offset equal to 30% of the bonus amount included in your income)
  • Interest earned from foreign sources (you may claim a foreign income tax offset for any taxes paid on this income)

What Are Dividend Income?

A dividend is a share of the profits paid to a shareholder. You may be sent a dividend statement if you’re a shareholder and your company has made a dividend payment. The amount you receive represents the share of the profits that belongs to you in your capacity as a shareholder.

For tax purposes, a dividend can be paid to you as money or other property, including shares. If you receive bonus shares instead of money, the company issuing the shares should give you a statement that shows if the bonus shares are a dividend.

Dividend income can be generated by listed investment companies, public trading trusts, corporate unit trusts, and corporate limited partnerships. Some dividends are eligible for an imputation or franking credit, which means that their dividend payments have been partly or fully refunded by the Australian Tax Office (ATO).

Rental Income – What declarations are required

If you receive rent or rent-like payments in any form, it is vital that you declare this to the ATO. The reason for this is quite simple: if you do not declare the income, you will be underpaying your tax. It is standard practice to include these amounts on your tax return, as you would any other income.

A few examples of rent-like payments are:

  • When you become entitled to keep a bond when the tenant defaults on the rent
  • If a tenant damages your property and you receive compensation from an insurance company
  • If a tenant reimburses or recoups a deductible expense, such as when they pay for repairs to damage they caused to your property
  • Any money received from renting out a room or a house or unit through a website or app (the sharing economy)

Reporting Your Trust Investment Income On Your Tax Return

Most people don’t pay much attention to their investments. This is largely a result of the fact that many people don’t understand how their money is invested, or how it makes money for them. When someone invests in an investment trust, however, and it’s managed by a professional fund manager, that person can be more hands-off about their investments but still reap the rewards.

If you have an investment trust (or several) in your portfolio and have decided to let someone else take care of the details, it’s important to make sure that you are receiving all the income and credits to which you’re entitled. The reason for this is that many people do not claim all the benefits they could be getting from their investments.

When you first purchase an investment trust, or set up a new investment trust account, it’s important that you make sure your accountant sets up an appropriate tax-free structure for your investment in order to maximize its potential return while minimizing any tax liability you may face. You must show any income or credits you receive from any trust product in your tax return.

All income you receive from any trust investment/product must be declared in your tax return, even if it isn’t paid to you directly. In this case, the income or credits are credited to your account balance as part of the trust structure. You then have time to apply them to your tax return.

Your Capital Gains Income

If you sell an asset that has increased in value since you purchased it, or if a trust you are a beneficiary of distributes capital, you may make a capital gain. You must declare the amount of any capital gain you make when you sell a capital asset, such as an investment property.

Generally, your capital gain is the difference between:

  • Your asset’s cost base (what you paid for it), and
  • Your capital proceeds (the amount you receive for it)

According to the Australian Taxation Office, your cost base is generally what you paid for the asset. The cost base includes any money or other assets given as part of your initial purchase price. For example, if you buy shares and have to pay $1 for each share, and receive 500 shares in total for $500 cash, your cost base is $500. If you then sell those shares for $600 each, your capital gain is $100.

Capital gain is treated as part of your total income, it isn’t tax separately.

Takeaway

It is clear then to see why ensuring that we receive the correct amount of tax paid can be so important. Ensuring that you are reporting your correct income will take some time and effort but it will be worth the outlay in the long run.

By simply checking your bank statements and investment records, you should be able to work out what your total taxable investments are and then do a little planning on where they might be best held to save on the amount of income tax that you owe or alternatively how they might be best utilised to ensure that you have a safety net for any financial difficulties in the coming years.

For more details regarding Investment Income, please visit the ATO website at www.ato.gov.au. If you need assistance in preparing your tax return with investments, you can always contact us, Profit First Accounting via the following method:

www.profit1st.com.au
admin@profit1st.com.au
03 5979 2671

Claiming the Tax Free Threshold

Claiming the Tax Free Threshold

Claiming tax free threshold? You might not earn all your income from one employer and that can affect how you fill out your tax return. Your income may also come from more than one payer.

This could be as an employee, such as receiving an annual salary, or a small business owner who may have employees but also carries out work for other clients independently or under an ABN .

Claiming

If you’re an Australian resident for tax purposes, you can claim the tax-free threshold each income year.

If you earn more than $18,200 in the financial year (1 July to 30 June), you’ll have to pay tax on the amount over $18,200. The tax-free threshold is not available to non residents for tax purposes.

If you have more than one job and your combined income exceeds $18,200 you cannot claim the tax-free threshold from each of your payers.

How much tax do I pay when I earn more than one income?

If you have more than one payer at the same time, generally, you only claim the tax-free threshold from one payer.

Usually, you claim the tax-free threshold from the payer who pays you the highest salary or wage. Where you have more than one payer, you should advise your other payers to withhold tax from your income at a higher rate. This is the ‘no tax-free threshold’ rate. Doing this reduces the chance of you having a tax debt at the end of the income year.

For example:

if your main job is with Payer A and they pay you $1,500 each fortnight before tax, and you also earn $400 each fortnight as a casual employee for Payer B before tax, then:

Payer A will withhold tax from your total income ($1,900) as if there was no tax-free threshold because Payer B also pays you and they didn’t withhold any amount for the tax-free threshold.

Payer B will withhold tax from your total income ($1,900) as if there was no tax-free threshold because Payer A also pays you and they didn’t withhold any amount for the tax-free threshold.

Takeaway

If you are in fact claiming the tax-free threshold after all your normal deductions, as a salaried employee, you need to sit down with your employer and make sure they know to not take offset tax from your pay.

If you need help with tax advice, you can always contact Profit First Accounting via the following:

Contact Us Via Our Website
admin@profit1st.com.au
03 5979 2671

For more details about tax free threshold, visit the ATO website.

Super: Withdrawing and Using

Super

Your super is the money you have contributed to your super fund over the years, together with any earnings and gains on this money, less any amounts you have withdrawn and any fees.

To be clear: your super includes: contributions from an employer or from you, earnings on your contributions, and any investment return earned by these amounts. Your super also includes other super funds to which you have rolled over (transferred) a lump sum or benefits from your super fund.

Using your super

Retiring is a big deal. You’ve probably worked hard for many years and you’re thinking about what you can do with your super money. At the same time, though, you’re wondering what the rules are when it comes to using your super.

If you’re thinking about taking your superannuation before you retire, it’s important to understand the rules and how it might affect you. There are different ways to access your superannuation while you are still working.

Withdrawing super

You can make a withdrawal if you meet a condition of release. For example, if you have reached your preservation age and retired, or if you have reached age 60 and ceased an employment arrangement.

You can withdraw your super as a lump sum if you’ve reached your preservation age and retired, or reached age 65, 65 years old or older. You can also apply for early release of your super under special circumstances, such as severe financial hardship, compassionate grounds or permanent incapacity.

You can only access your super in the form of a lump sum and have it paid directly into a nominated bank account. You should check with your super fund before making any decisions about withdrawing your super.

What are the tax consequences of withdrawing my super?

Cashing in your super is one of the biggest financial decisions you’ll ever make, so it’s important to think about the tax implications before you sell off your hard-earned savings.

Withdrawing your super early – before you reach retirement, or what’s known as ‘preservation age’ – can result in a tax rate as high as 93%, depending on how much you take out. That’s because early withdrawals from superannuation are treated like income and taxed accordingly.

What is ‘preservation age’?

Preservation age is the earliest age you can access your superannuation, which is usually after you retire. This means that unless you qualify for an exception, any super funds you withdraw before reaching preservation age will be taxed at a higher rate.

Your preservation age depends on when you were born:

  • Before 1 July 1960: 55 years and over
  • Between 1 July 1960 and 30 June 1961: 56 years and over
  • Between 1 July 1961 and 30 June 1962: 57 years and over
  • On or after 1 July 1962: 58 years and over

Takeaway

The decision of when to use your super will depend on the future plans you have. Your best option is to discuss with an accountant and make an informed decision on how and when you can use your super. It’s not as simple as just withdrawing it all at once and starting again, but it can assist you in getting the most from your retirement.

If you’re needing help, contact us today!

Contact Us Via Our Website
admin@profit1st.com.au
03 5979 2671

References: Ato Website

What is a Director ID, How Does It Work, Do You Need One?

Director Identification Number

Have you heard about the Director ID or Director Identification Number (DIN) and wondered whether you need to get one?

The Australian Government introduced this new identification requirement as part of a package of reforms to address illegal activity within the market.

What is a director identification number (ID)?

A director identification number (DIN) is a unique eight digit identification number issued to the director of a company. A DIN is issued to an individual who holds the position of director in a company or has held that position in the past.

How does it work?

A director identification number (DIN) is a unique number that identifies your company and is used on all official government records to make it easier for ASIC, the Australian Taxation Office (ATO) and other government agencies to manage your company’s information.

When you register a new company with ASIC, you will be issued a director ID. You can use this number to identify yourself to government authorities, such as ASIC and the ATO.

When you pay ASIC fees for your company, you will be prompted to enter your own Director Identification Number (DIN). You can find your number on any notice that ASIC has sent to you since it started issuing numbers.

If you have already notified ASIC of your appointment as a director, but have not yet received a DIN, you can use the temporary password provided on your notice or reminder letter. If you cannot find this password, contact ASIC for assistance.

Who needs to get a director ID?

Any person who is formally appointed as a director of an incorporated company is required to have a Director Identification Number (DIN). This includes foreign directors.

Foreign directors are individuals who are not Australian citizens or permanent residents but are formally appointed as a director of a company incorporated in Australia.

If you’re a foreign director, you will need to apply for a DIN before you can be appointed as a director of the Australian-registered company.

This number is issued by the Australian Securities and Investments Commission (ASIC) and must be obtained before being formally appointed as a director. It identifies directors so they can be contacted if required by ASIC.

Conclusion

Essentially, a director’s ID is like a passport for the business world, allowing you to prove that you are who you say you are. The purpose of this is to stamp out illegal activity and make it harder for people to hide behind anonymous business entities.

We hope that you’ve found this to be a useful guide in understanding Director ID. If you require more information, please visit ASIC, or if we can help you, please contact us for assistance.

www.profitfirstaccounting.com.au
admin@profit1st.com.au
03 5979 2671

Income & Work Related Expenses For Your Tax Return

Tax Return

When you lodge your tax return, you must declare all the income you receive.

Though the ATO prefills most income information from your employers and financial institutions, you will still need to make sure that all income you received are declared.

Income you must declare on your tax return

The income you must declare includes:

  • Income you earn as an employee (including overseas employment)
  • Income you receive as a business owner, including those who are self-employed
  • Company pension and annuity
  • Government payments and allowances
  • Income you receive from investments, such as interest and dividends
  • Income you receive from rent on property you own
  • Income you receive from your spouse or partner, including their business income and investment income.

Income that is not taxable

Sometimes, you might earn money from things you don’t put on your tax return. There are three different kinds of money that do not go in the tax return. These are:

Work-related expenses – how they affect your tax return

You’re entitled to a deduction for work-related expenses you incur when you earn income as an employee.

These includes:

  • The cost of travel to and from your place of work (including trips between different workplaces)
  • Meal and accommodation costs when you have to travel overnight for work – for example, if you have to attend a conference in another city
  • Work-related phone calls, internet use, stationery, laundry and dry cleaning

The cost of travel between your home and work isn’t generally tax deductible unless:

  • There is no regular workplace where you need to carry out your duties as an employee – for example, if you have no fixed place of employment, such as sales representatives or real estate agents
  • Your home is a base of employment – for example, when you run a business from home or use your home address on business cards

Knowing is half the battle

Good recordkeeping will help you to make sure that the right amount of tax is withheld from your pay and that you claim only the deductions you’re eligible to. By getting organized, you can find this information faster once your tax time comes around.

We hope that you’ve found this to be a useful guide on the basics of preparing your tax return. If you require more information in preparing your tax return, please visit www.ato.gov.au, or if we can help you file your income tax return, please contact us for assistance.

www.profitfirstaccounting.com.au
admin@profit1st.com.au
03 5979 2671

References:
Australian Taxation Office Website

Bookkeeping for Small Business Owners

Bookkeeping

Keeping track of the financials and bookkeeping of your business can be a tedious job. The deadlines are often tight and intimidating. Independent bookkeepers have all the necessary techniques to deliver you these services, tailored to your specific situation.

Effective bookkeeping is essential to the long-term success of your company. Without it, you won’t have a clear understanding of where your finances are at all times, which can have dire consequences, ranging from late or missed payments to underpaying taxes.

But you don’t need to panic about managing the books for your small business. The following tips will help you get organized and get started:

Review your bank statements

It’s important to review your bank statements. It’s a good idea to do this on a monthly basis. By reviewing your bank statements, you can make sure that everything is balanced and there aren’t any suspicious charges.

Fix any errors as soon as possible

In bookkeeping, as in life, mistakes happen. If you’re doing your own bookkeeping, it’s important to fix errors promptly and make sure they don’t happen again.

The best way to avoid making mistakes is to stay on top of the bookkeeping process. But even if you’ve been diligent about keeping up with the books, it’s still possible that an error could slip through.

The key is to catch those mistakes early and fix them quickly. If you don’t catch a mistake until the end of the year, you’ll have to dig through all of your records to find where it happened and fix it, which can be time consuming and costly.

If you’re using accounting software like Xero for your bookkeeping, fixing common errors like overdrawn bank accounts or incorrect transactions is fairly simple. Here are some steps for how to do so:

Go into your account register in Xero and click on the date field of the transaction in question. It will display a window that allows you to change the date and description of the transaction — make any necessary corrections here.

Once changes are saved, create a journal entry to correct the balance of your account register.

Don’t forget about payroll

When doing your bookkeeping, don’t forget about payroll. Payroll can be an essential part of bookkeeping that can help you get a better understanding of your financial health.

Here are some ways that payroll software can help with bookkeeping:

Payroll is one of the biggest expenses for most businesses — especially small businesses — so it’s important to keep track of it when doing your bookkeeping. You don’t want to overspend on payroll expenses or pay too little and find yourself in trouble later.

Payroll expenses should be part of your budget, which means you need to include them in your bookkeeping. Having this information will allow you to create a realistic budget and make it easier to avoid overspending on payroll.

You can use payroll software to create accurate tax estimates, which is important for keeping track of your finances and meeting deadlines throughout the year. The more accurate information you have about taxes, the easier it will be to avoid paying too much or too little in taxes.

Knowing how much you spend on payroll each month will help you keep track of other expenses as well.

Make sure to keep all receipts

For every business expense you make, you should be able to confidently answer these questions:

Why did I make this purchase?

What purpose does it serve?

How does it help my business?

To answer these questions, always keep receipts for your business expenses. You can keep them in your wallet, purse or another safe place until you have time to file them away.

If you haven’t been keeping receipts, start now. But don’t worry about what happened before. Just start from today and keep every single receipt for all of your business expenses going forward.

Automate your bookkeeping

For many small business owners, bookkeeping is an afterthought — something to be dealt with at the end of the day or month.

But bookkeeping matters, because it’s how you keep track of your organization’s financial activity. It’s also how you tell whether your business is making money or losing it. The better job you do of keeping track of these things, the better off your organization will be.

Accounting software can help save time and sanity by automating most of the tasks involved in bookkeeping.

Consider hiring a professional

Although most small business owners like the idea of keeping their own books to save money, we’ve found that the time spent by a business owner in doing his or her own bookkeeping is rarely minimal. Most do-it-yourselfers find that it takes more time than they thought it would and produces results of questionable quality.

The best advice is to consider hiring a professional bookkeeper. Even if you do your own accounting at tax time, having someone else handle your bookkeeping will enable you to focus on running your business rather than spending hours entering transactions into an accounting system.

You’ll also need to choose an accounting method. For tax purposes, you need to keep track of all income and expenses either on a cash or accrual basis. With the cash method which we recommend as a profit first professional, record income when it’s received and expenses when they’re paid.

Takeaway

It’s not easy to be an entrepreneur, and it’s certainly not easy to be an entrepreneur that manages his or her own business finances. It can be a big job keeping up with the money side of things, especially if you are juggling everything else that’s important in your life.

The good news is, there are many ways to make the bookkeeping side of your business easier on yourself. We hope these 5 steps helped you. If you have further questions, you can always contact us at admin@profit1st.com.au or simply learn more by checking our website at www.profitfirsaccounting.com.au

Local Woman Shares Her Story in New Book

New Book: The Women Changing The World

New Book Release: Vanessa Fiducia of Profit First Accounting is part of a collaboration sharing advice and inspiring women to follow their calling, believe in themselves, and do their part to change the world in big and small ways!

What if we could inspire people everywhere to change the world?

This question was the inspiration for creating this book. A vision to create something beautiful yet powerful that would inspire others to take action, in their own lives and the work they do, to find ways to make the world a better place in big and small ways.

This book is a collection of stories for women by women focused on inspiring purpose, vision, and everyday activism. Featuring real-life, relatable role-models from all walks of life who are women changing the world through entrepreneurialism, education, conscious living, giving back, advocacy, innovation, and more who had the courage to listen to the call to make a difference and took action to make it happen!

Having the confidence to take action as a changemaker is one of the most important qualities you need to succeed in making a difference as Vanessa explains, “There is no point running yourself into the ground and working around the clock if it is not why you got into the business in the first place. Work smarter not harder. Just because this is how we have seen it done for years, it doesn’t mean this is the way of life and it is never too late to go against the gain and change it up and do what you believe in. Someone might just look at what you are doing and what you are implementing and be inspired to do the same and before you know it the world is changing what we once knew for the better”.

Co-author Peace Mitchell of The Women’s Business School says, “Believing in yourself is an incredible force of power that starts with you. Whether you want to change the world, invent an incredible product, take on the big brands, inspire people, take your business global, start a movement, or dream bigger in any way it’s time to take action and follow that calling!”

It can be challenging to be a successful leader and Vanessa gives this advice to others thinking about following their calling to make a difference in the world. “Even when the odds are stacked up against you and you feel the weight of the world on your shoulders, never give up”.

“We wrote this book because we know that there are so many women out there with big dreams and ambitions who are playing small and being held back by fear and self-doubt. We wanted to send a strong and clear message to the world and to women everywhere that it doesn’t have to be this way, and this book will guide you through overcoming your fears and self-doubt and inspire you to instead embrace the courage to follow your dreams and make a difference.” Mitchell explains.

The Women Changing the World launches nationally in November with an online festival featuring interviews and presentations from each of the 34 authors.

For more information about The Women Changing the World, visit www.thewomensbusinessschool.com

For an interview with Vanessa Fiducia contact admin@profit1st.com.au or 03 5979 2671.