The Australian Taxation Office, requires all business to keep their accounting records for at least five years. All records should be in accordance with Generally Accepted Accounting Principles (GAAP) and Australian Accounting Standards. Records that you should have readily available in either printed or electronic format include but are not limited to:
• Governing documents
• Financial reports
• Cash book records
• Tax invoices and records
• Employee records
• Banking records
• Regulatory documents
• Contracts and agreements
• Invoices received
The Business Activity Statement (BAS) is one of the primary reasons why you should update your accounting records regularly. The Australia Tax Office requires businesses to lodge their BAS on either a monthly or a quarterly basis. Failure to lodge on time can lead to hefty penalties. Non-compliance will also make it harder for you to deal with banks and other financial institutions.
Are you still using the traditional accounting system of Cash Book, Journals, and Ledgers? If you are, you should probably consider switching to a computerized system. With the traditional system, everything needs to be entered manually which is time consuming and prone to errors. With a computerized system, on the other hand, entries and updates are done automatically after each transaction which takes almost no time at all and has a very low margin for error. Most systems also cover your accounting records, updating them in real-time. There are numerous accounting packages available in the market today. With enough research, you are sure to find one that is perfect for the needs of your business.
You can take your computerized accounting system to the next level by augmenting it with cloud computing capabilities. ‘Moving to the cloud’ means moving your data storage from your in-house server to an offsite server managed by a third party. Demand for cloud computing is quite high primarily due to the improved back-up and recovery that it brings. Data in the cloud is automatically updated at regular intervals, depending on your Cloud Computer Service Provider. So, for example, you lost all your data of the changes made in your accounting records for the week, all you’ll need to do is download the copy in your cloud and your records will be up-to-date again. Other benefits include:
• Accessibility – you can access your data from anywhere in the world using any device that has internet connection.
• Reduced cost – you won’t need to spend on maintaining and upgrading your servers. Shutting down your in-house
server also leads to lower electricity costs and lower IT maintenance costs.
• Scalability – the cloud is flexible. You can increase or decrease your server space allotment whenever necessary. For example, you can improve your server capacity by 20% during peak months then scale it down when sales normalize.
Outsourcing Accounting Services
Business Process Outsourcing (BPO) has been the fastest growing industry in the world for the past decade. It has expanded to all kinds of areas. Today, you can even outsource your needed accounting services. Switching from having an in-house accounting staff to simply acquiring outsourced service has the following advantages:
• Improved focus – the service provider will take care of all your accounting needs so you can concentrate on your business’ performance and growth.
• Reduced cost – with outsourcing, the only cost you need to worry about is the fixed monthly fee the provider will bill you. You can forget about all the other costs often associated with maintaining an in-house accounting staff such as wages for the accounting staff, cost of hiring and training of accounting personnel, rental fees for the accounting office, etc.
• Increased Reliability – providers only employ professionals with years of experience so the likelihood of the latter making human errors is very low.
Knowing how to properly keep and efficiently manage your accounting records will be a great help to your business. Modern options such as computerized systems, cloud computing, and outsourcing can even automate your accounting process therefore ensuring that your accounting data and records are updated regularly, as often as once per hour.
Keeping accounting records is unavoidable. It is best that you start investing in improving your accounting and record keeping systems. Contact a reliable accounting firm today!