From Chaos to Control: How Bookkeeping Can Boost Business Performance

How Bookkeeping Records are Maintained 

Bookkeeping records can be maintained using traditional methods, such as manually entering transactions in a ledger or spreadsheet, or through digital methods, such as bookkeeping software. Regardless of the approach used, accurate and organised records are essential to measuring business performance. 

For many small businesses, bookkeeping responsibilities are assigned to bookkeepers explicitly hired to maintain accurate income and expense records. Bookkeepers also generate financial reports, which are used to measure business performance and make informed decisions. 

Everyday bookkeeping tasks include: 

• Income and expense records 
• Sales tracking 
• Purchase records 
• Payroll reporting 
• Bank and credit card reconciliation 

Whilst bookkeepers are still in high demand, digital bookkeeping software has become increasingly popular due to its efficiency and accuracy. Popular options include Thriday, Xero, and MYOB. These software programs automate many bookkeeping tasks and provide real-time financial information. 

In the next section, we'll discuss the best bookkeeping software features to consider when choosing bookkeeping software. 

Which Features in Bookkeeping Software Are Most Important? 

When choosing bookkeeping software, it's important to consider the features that best suit the needs of your business. Here are some of the best bookkeeping software features to look for: 

• Invoicing: Most bookkeeping software includes invoicing features. This allows you to create and send customer invoices, track payments, and set up automatic payment reminders. 
• Expense Tracking: Expense tracking features allow you to keep track of all business-related expenses in one place. This includes tracking purchases, receipts, and accounts payable. Some software like Thriday can even automate data entry by scanning receipts and extracting GST. 
• Bank Feeds: Bank feeds allow you to connect your bank and credit card accounts directly to your bookkeeping software. This allows for real-time tracking of your financial transactions. In the case of Thriday, you can even open new bank accounts* to automatically categorise transactions in real-time.
• Reporting: Look for software that provides detailed financial reports, including balance sheets, income statements, and cash flow statements. This information is essential for measuring business performance and making informed decisions. 
• Integrations: Consider software that integrates with other tools you use in your business, such as payment terminals. This can help streamline your business processes and save time. 
• User-Friendly: Choose software that is easy to use and navigate. A user-friendly interface can save time and reduce frustration when performing bookkeeping tasks. 

You must weigh the pros and cons of each bookkeeping software option and choose the one that best fits your business needs. The following section will discuss how to measure business performance using bookkeeping. 

How to Measure Business Performance with Bookkeeping

Bookkeeping provides valuable information that can be used to measure business performance. By tracking financial data, you can gain insight into the financial health of your business and make informed decisions. Here are some key metrics to consider when measuring business performance using bookkeeping: 

Revenue 

Revenue is the total amount of money earned from sales or services. Tracking revenue can help you understand how much money your business is making and identify areas for improvement. 

Expenses 

Tracking expenses can help you identify where your business is spending money and help to identify areas to cut costs. This can help increase profitability and cash flow. 

Profit and Loss 

The profit and loss statement, also known as an income statement, shows your business's revenue, expenses, and net profit or loss over a specific period. This statement can help determine if your business is making or losing money. 

Cash Flow 

Cash flow is the movement of money in and out of your business. Monitoring cash flow can help you predict future cash shortages or surpluses and make informed financial decisions. 

Accounts Receivable and Payable 

Accounts receivable is the money owed to your business by customers, while accounts payable is the money your business owes to suppliers and vendors. Tracking these accounts can help you manage cash flow and ensure timely payments. 

Return on Investment (ROI) 

ROI measures how much profit your business generates compared to the amount invested. This metric can help you determine if investments in your business are paying off. 

By regularly tracking these metrics, you can gain insight into the financial health of your business and make informed decisions. In the next section, we'll discuss how Thriday automates bookkeeping to make the process straightforward for small businesses. 

How Thriday Automates Bookkeeping 

Keeping accurate financial records is essential for small businesses, but it can be time-consuming and overwhelming. That's where Thriday comes in. Thriday is a bookkeeping service that uses automation to make the process easier for small business owners. Here are some of the ways Thriday can help: 

1. Automatic Imports: Thriday can automatically import financial data from your bank account*, removing the need for manual data entry. 
2. Categorisation: Thriday uses machine learning to categorise transactions, making it easier to track expenses and revenue. 
3. Invoicing: Thriday can generate and send invoices on your behalf, track payments, and send reminders. 
4. Receipts: Thriday has an in-built receipt scanning software with intelligent GST extraction.
5. Payments: Thriday can automate accounts payable with its popular Bill Manager feature.
6. Reporting: Thriday provides detailed financial reports, including balance sheets, income statements, and cash flow statements. 
7. Integrations: Thriday integrates with other business tools, such as Stripe, Shopify and PayPal, to streamline business payments. 

By automating bookkeeping tasks, Thriday can save small business owners time and money. In addition, the software provides valuable insights into business performance, allowing owners to make informed decisions. 

‍

‍

When Should You Do Bookkeeping? 

Bookkeeping is an ongoing process that should be conducted frequently to ensure accurate financial records. Here are some tips for when to do bookkeeping: 

• Daily: It's a good practice to check your bank accounts daily to ensure accuracy and catch any potential issues early. 
• Weekly: Set aside time each week to review transactions, reconcile receipts, and review financial reports. 
• Monthly: At the end of each month, you should 'close the books' for the prior period and review your profit and loss statement, balance sheet, and cash flow statement to track business performance. 
• Quarterly: Prepare and file quarterly BAS reports. 
• Annually: At the end of each financial year, prepare financial statements and tax returns to file with the ATO. 

Regularly doing bookkeeping allows small business owners to stay on top of their finances and make informed decisions. In the next section, we'll discuss how much small businesses typically spend on bookkeeping services. 

How Much Do Small Businesses Spend on Bookkeeping? 

Bookkeeping services can vary in cost depending on the business size, the complexity of the financial records, and the level of service needed. On average, bookkeepers cost $45 - $80 per hour, but several factors could increase the cost significantly.

• Number of transactions: The more transactions a business has, the more time and effort it takes to categorise and reconcile them, which can increase the cost of a bookkeeper. 
• Level of service: Some bookkeepers offer basic data entry and categorisation, while others provide more comprehensive services, such as financial reporting and tax preparation. 
• Experience: Bookkeeping rates can vary depending on the bookkeeper's level of experience and expertise. It can also vary depending on the type of industry your business operates in.

On average, small businesses can expect to pay between $400 to $500 per month for bookkeeping services. However, some businesses may pay as little as $200 per month for basic services, while others may spend upwards of $600 or more for more complex needs. Thriday, on the other hand, is only $29.95 per month, which is a massive saving over the course of the year. Many Thriday customers save over $1,000 annually using our automated bookkeeping services. 

In the next section, we'll cover some frequently asked questions about bookkeeping for small businesses. 

‍

Bookkeeping FAQs. 

What's the difference between bookkeeping and accounting? 

Bookkeeping involves the day-to-day recording and categorisation of financial transactions, while accounting consists in analysing financial data and preparing reports, such as financial statements and tax returns. 

Can I do bookkeeping on my own? 

Yes, small business owners can do bookkeeping independently using automated bookkeeping software like Thriday. 

What are the benefits of outsourcing bookkeeping services? 

Outsourcing bookkeeping services can save time and reduce the risk of errors or omissions. It also allows small business owners to focus on other aspects of their business, such as sales and marketing.  

What's the best bookkeeping software for small businesses? 

The best software for small businesses is Thriday because it is easy to use, affordable and automates most manual tasks.   

How long should I keep my bookkeeping records? 

You must keep bookkeeping records for at least seven years for tax purposes. 

Bookkeeping is essential to managing a small business, as it provides a clear picture of the business's financial health. By maintaining accurate financial records, small business owners can make informed decisions, measure business performance, and comply with tax laws and regulations. 

Bookkeeping records can be maintained manually or through bookkeeping software, and different features and tools can help streamline bookkeeping processes and improve accuracy. Thriday offers automated bookkeeping services that can help small business owners save time and reduce the risk of errors. 

While the cost of bookkeeping services can vary depending on the size and complexity of the business, outsourcing bookkeeping services can provide significant benefits, such as time savings and reduced risk. 

By understanding the basics of bookkeeping and accounting, small business owners can make informed decisions and maintain accurate financial records. Whether you choose to do bookkeeping on your own using Thriday or outsource to a bookkeeping service, it's essential to prioritise accurate and timely record keeping.