Four Common Bookkeeping Mistakes to Avoid

25 Jun 2015 | |

Bookkeeping tips for Melbourne businesses

As an entrepreneur in Melbourne, your overall goal is success. And more specifically, financial success. But financial success cannot be achieved when your company fails to handle its accounting paperwork, or handle it properly. Ninety percent of small businesses that fail do so because of poor cash flow, the result of bookkeeping mistakes and mismanagement. Having sound financial management is a foundational key to a successful business. Here are four common bookkeeping tips by Melbourne businesses that you should avoid:

  1. Using the Wrong Accounting Methods

There are two methods that are most popular for accounting: cash and accrual. Cash accounting is a simpler method because it is based on the physical flow of cash into and out of a business. This method is often used by sole proprietors. Accrual accounting records the income and expenses as soon as they occur, regardless of whether cash changed hands. As businesses become more complex, they often make the jump to accrual because it can accurately match expenses and revenue.

  1. Combining Personal and Business Finances

Another mistake made is combining personal finances and business finances, whether on purpose or accident. This is a common mistake made by small businesses in Melbourne who are starting off, but it is a costly one. Personal and business finances should be viewed as religion and politics: the two should never mix. Regardless of whether your business starts out with one person or one hundred people, it is imperative that personal and business finances remain separate at all times. That is why new business owners, even sole proprietors, need to open a business bank account immediately upon starting the company and ensure all business income is deposited into that account. With the help of an accountant, entrepreneurs can devise a strategy for earnings management that dictates how cash can be removed from the business account to meet expenses and investment goals. The earnings in this management strategy are drive by things such as timing of payments for your company expenses, cyclical cash flow needs, and how much of the company profits should be re-invested into the company.

  1. Not Conducting Basic Account Reconciliation

Reconciling business account books with bank statements each month is one of the fundamental jobs of an accountant. If you are not equipped to do it yourself, then you absolutely must hire a professional to handle it. This process is relatively simple in theory: you compare your company books with your make statements and ensure that no discrepancies arise. If there are any discrepancies you must contact the bank immediately in order to rectify it. Doing this monthly will ensure that any accounting errors are caught immediately and resolved before they grow into an even bigger financial problem for the company.

  1. Not Understanding the Difference between Cash Flow and Profits

Businesses can have positive cash flow, for the short term, and still not turn a profit. On the other hand, a business can have a negative cash flow, for the short term, and be profitable in the long haul. The first example takes place when businesses pay suppliers prior to receiving payment from their customers and the second example often takes place with cash-based businesses that pay vendors on terms. It is important to know the difference between these two and handle them accordingly.

All of these mistakes and more can be avoided when you hire a virtual accounting service to handle all of your bookkeeping needs.



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The Advantages Of Having Solar Systems For Heating Water In The Swimming Pool

Pool Heating Melbourne To begin with, solar systems for heating water in the swimming pool will easily save your money. This means that your swimming pool may be heated rather cheaply and efficiently in this way, with energy conservation. Here is the word about solar systems which are very cheap and can be placed independently. What will ensure that the water in the swimming pool is clean is the pump. It is used for filtering. However, water in the swimming pool will use this solar system to circulate through the collectors. Solar system for heating water is a low – cost one Everything mentioned above underlines that the system is rather a low-cost one. Similarly, it is one of the simplest systems for solar energy which exists. Nowadays, people in different part of the world have this system installed. They are rather satisfied because of its great characteristics. Of course, when you build up something it is important to be efficient and to perform its function in the best way. That is why solar systems for heating water in the swimming pool are highly recommendable. Covers for the swimming pools First of all, one should have a cover for the swimming pool. Needless to say, this cover is both the most effective and safest thing which can be used to reduce the cost of swimming pool heating. If one makes the entire system without the cover, there will be more evaporation of water. Besides all that swimming pool covers will allow better absorption of solar. Rings for the swimming pools Pool Heating DiagramSome people use so called ‘rings’ which are several meters in their diameter big. You need a couple of rings to succeed in covering greater part of the surface of the water in the pool, almost 80%. Although these rings are less effective than covers, it is good to have them if one does not have other solution. What are solar collectors? To begin with, the water from the swimming pool is pumped through a filter. After that, it is pumped through the solar collector. It is heated before returned to the swimming pool. There is a difference between solar collectors for heating swimming pools in hot and cold weather conditions. When installing solar pool heating we have to think about the characteristics of the roof, because they may have great effect. In countries with the hot climate, solar collector may have different usage. It can be used to cool the swimming pool in summer. How this happens? Well, water may circulate through the collector at night. What is important is that when installed solar collectors have to be placed to grasp the maximum of solar energy in a daily level, or in a longer period of time, such as season. Scientists claim that the best position of solar collectors in the places in the northern hemisphere is towards the south. But, what happens these days is that inclination and the location of the collector are very important. It can be rotated and moved under 45° C the east or west of the southern point and its performance will not be reduced. An alternative to solar heating is using gas pool heaters which are also a cheap an effective way to keep your pool heated. Filtered water simply bypasses the solar collector in just one cast. It is when the temperature of the collector is similar to those of the swimming pool happens something different. After that, water is returned to the swimming pool.

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Which is the Best Removalist Company for You

Furniture-Removal-CompanyShopping around for a removalist company can become a frustrating experience. All of these companies seem to offer the most outstanding services, the best prices, the best of help…but in reality there are no two companies which are the same. Therefore, when hiring a removalist, you should really pay attention to a few considerations. These will help you find out which is the best removalist company for you!

Good research is imperative

Take your time to run an extensive research online. There are dozens of removalist companies available in your area, but not all of them are reputable and trustworthy. Note down a few company names that you consider would be suitable for your needs, contact the companies and ask for quotes. Now compare these quotes, the overall services available, customer satisfaction and so on. Check the details of this cheap furniture removal Melbourne based company, as you truly need a company that suits not only your needs but also your budget.

Guarantees offered

What will happen if removalists will damage any of your important belongings during transportation? How will you get compensation? You will be compensated only if the company offers such a breakage guarantee. Also check that the company is properly licensed and insured. Generally, you can get access to all the warranties offered by the company right on their website, so read everything carefully and don’t hire the company unless it offers some powerful guarantees (especially if you have many valuable items, or if these need to be transported longer distances).

A friendly company

Removalist TruckYou really need to ensure you are talking to friendly professionals ready to offer you all the advice and help that you need. Keep in mind that you are going to work and meet with the team for several hours or days, so you need to be able to feel open with them. There are many such companies where the experts are simply that- doing their job and not being too friendly…

Customer service is the most important component of any business. You need to able to contact them any time need, get the answers you need and see that the experts are truly cooperative and helpful.

Pricing

Certainly pricing is not everything to consider when hiring a removalist. However, the prices charged will play a key role in your final decision. Comparison shop carefully and see which company offers the widest range of services and solutions for the same price. The cost of a home moving or business moving is not cheap, but still, you should not pay a fortune for these services. Competition is very tough out there, so with proper research you will surely find the company with the best service and the most advantageous prices charged.

Experience in the industry

Experience is yet another important consideration. The company you will hire needs to have an extensive experience in the field, being well established for several years. It is not implied that a novice company might not be good, but you simply cannot risk anything and send off our valuable items with a company that doesn’t have any experience in the field of transportation, packing, loading/unloading valuable items and so on.

Search for the perfect removalist company several weeks in advance. Don’t leave everything for the last days, because you have plenty of things to do either way when you need to move houses!