Bookkeeping For Dummies Cheat Sheet (Australia/New Zealand Edition)

This step-by-step bookkeeping checklist should help you sleep easy at night knowing that you have done what you needed to do to get your books in tip-top shape.

1. Ensure you set up bank feeds for every account.

2. At least once a month, reconcile every bank account against bank statements.

3. Look for pre-dated or future-dated transactions.

4. Eat a family bar of chocolate in one sitting (oh yes, and clean up the debtors list).

5. Sweep through the creditors list.

6. Check tax codes on all transactions.

7. Reconcile your GST liability accounts.

8. Give inventory the once over.

9. Reconcile all payroll liability accounts.

10. Scan transaction reports for weird stuff or mistakes.

11. Read through the financials and check they make sense.

Understanding the difference between account types is the secret to coding transactions correctly. Here’s the cheat’s guide to understanding the difference between assets and liabilities, equity and income, bananas and apples.

• Current asset: Anything that a business owns that can realistically be converted into cash within the next 12 months.

• Non-current asset:A physical asset such as office equipment, land, buildings, computers or motor vehicles, that isn’t expected to be converted into cash within the next 12 months.

• Current liability:An amount owed by the business that is due within the next 12 months, including scary stuff such as credit cards.

• Non-current liability: Anything you owe that isn’t due to be paid out within the next 12 months, such as hire purchase debts or bank loans.

• Equity:The ‘interest’ that shareholders or an owner has in the business, including both capital contributed and the profit or loss built up over time.

• Income:Money generated from sales to customers or returns on investments.

• Cost of sales:What it costs in raw materials, supplies or production labour to make the goods that you sell (also called cost of goods sold or variable expenses).

• Expenses:The day-to-day running costs of your business, including things like advertising, bank charges, computer consumables, diamond rings, electricity, motor vehicle expenses, rent, telephone expenses and wages. (Just kidding about the diamonds.) Expenses are sometimes also called fixed expenses or overheads.

Forget birthdays, anniversaries and Christmas and instead, punctuate your diary with a list of tax deadlines. Here’s a summary of the deadlines that every Australian bookkeeper needs to know about in order to stay out of trouble.

Understanding debits and credits is a tricky business. (How did accountants get to be so warped, you may wonder?) Don’t sweat, with this table you can get your debits and credits spot on, every time.

With a bit of practice, understanding financial statements is easy. Think of your Balance Sheet reports as a set of before-and-after photos, with your Profit & Loss report telling the story of what happened in between.

• Balance Sheet report: Provides a snapshot of the value of assets, liabilities and equity at any point in time

• Profit & Loss report: Summarises income, expense and net profit over a specified period of time

• Statement of Cash Flow: Examines the cash flows in and out of a business

• Trial Balance report: Lists the debit and credit balances of all general ledger accounts at any point in time

How do you prevent employee fraud in the workplace, and how can you be sure that nobody has their hand in the till? Like double cream and crash diets, keep bookkeeping tasks and the handling of cash or business assets completely separate. This includes

• Authorising online transactions via internet banking

• Working on a cash register and taking cash

• Receiving payments from customers

• Balancing cash registers at the end of the day

• Accessing assets, such as business inventory

Even with a calculator close to hand, a few shortcuts to help you calculate Goods and Services Tax (GST) are real handy. The whole business of dividing by 11 or multiplying by 0.15 can get very ugly indeed.

In Australia, if you’re a contract bookkeeper providing BAS services, then you must register as a BAS agent. The penalty for providing BAS services without registering ranges from a not insignificant $43,000 for an individual to a whopping $212,500 for a body corporate.

• A BAS service includes any bookkeeping activity related to GST or PAYG, including configuring tax codes in accounting software, coding tax invoices, generating employee payment summaries or preparing Business Activity Statements

• You don’t have to register as a BAS Agent if you’re an employee receiving wages or you only do basic bookkeeping data entry based on explicit instructions provided by the client or by their tax agent.

• For details about registering as a BAS Agent page, visit the Tax Practitioners Board website.