Financial reporting should be the main reason that you spend time on your small business bookkeeping! Not just because your Accountant demands it or to satisfy the Tax Office! If you are the owner of a micro small business Australia and you learn to Be Your Own Bookkeeper you will be able to review your financial reports with confidence and monitor your business’ progress. You might even be able to improve your business bottom line!
Below is a list of reports that you should monitor to track to your Micro Small Business:
Balance Sheet: Lists all the Assets, Liabilities and Owners Equity
Profit & Loss Report: Shows your Income & Expenses for a particular period and the resulting Profit or Loss
Aged Receivables: A list of amounts owing to you by your Customers
Aged Payables: A list of amounts that you owe to your Suppliers
GST Summary: Shows your GST Liability at any point in time
Sales Summary Report: Shows your Sales totals for a particular period
Why is it important to review your Balance Sheet?
Often Business Owners ignore this report and just concentrate on their Profit and Loss Report. The Balance Sheet holds crucial information as it shows all the Assets owned by your business, any Liabilities incurred by your business and the Owners Equity. The ratio between Assets and Liabilities is important. The total Assets should always be greater than the total Liabilities. Think of this report as a snapshot of your business at a particular date.
Any assets that you purchase or liabilities that you incur should be added to the this report.
For example if you purchase a new Motor Vehicle to use in your business it needs to be added to the Balance Sheet as an asset. If you take out a loan to pay for the Vehicle, the loan needs to be listed as a liability.
What is a GST Summary Report?
You should check your GST Summary report each month to see what your GST liability is. Ideally you could then transfer this amount to a separate Bank Account (High Interest Account is good!)
Then when the time comes to pay your GST to the tax office you will not be struggling to find the cash!
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