SubscribeBookkeeping: Money In, Money Out
Bookkeeping records the flow of money in and money coming out of your business. A fundamental factor of any healthy small businesses in and around Ormeau, Yatala, Coomera, Eagleby and Beenleigh, South Brisbane, Australia, is whether there is more money flowing in, than is flowing out.
Tracking the flow of money in and out of your business occurs through the recording of each transaction by the person responsible for your bookkeeping. Contact us NOW and we’ll help you determine whether there is more money flowing in, than is flowing out of your business.
In basic terms there are four sources of income, and four reasons why money flows out of your business.
Depending on your business, income is generated through the sale of goods and services, or the sale of business assets. Other sources of income can be through loans to the business, either from yourself, or money that you have borrowed from relatives, friends, or formal channels such as financial institutions.
There are very few businesses that incur no expenses to generate the income. Thus money flowing out of your business will be to pay bills for overheads, such as power, telecommunications, rent, wages etc.
Other expenses include buying or replacing assets to run the business. Then there’s your remuneration, as drawings etc, and also your business may lend money to others.
The recording of each transaction by your bookkeeper is critical to protect all parties concerned. Each transaction should be supported by the appropriate documents. When the Australian Taxation Office decides to audit your business, they will often need to see all your supporting documentation.
Your bookkeeper needs to ensure that all the documentation is filed in such a way that it can be easily traced. Each transaction recorded in the bookkeeping system should be supported by the relevant documentation also.
Consider the day that a piece of equipment fails, and you wonder if it’s still under warranty. Your bookkeeper should be able to tell you when you bought the equipment, how you paid for it, and also be able to located the documentation relevant to that equipment.
A logical and ordered filing system is just as important as the balance sheet or P & L reports for your business. For more information or a free appraisal of your bookkeeping system, contact one of our South Brisbane bookkeeping service NOW, and we’ll help you determine whether there is more money flowing in, than is flowing out of your business.
