What is Bookkeeping Services in Australia? [Full Guide]

Having a good business in Australia is more than just having an excellent product or service – it is also about keeping good financial records. That is when bookkeeping services come in. Bookkeeping services help you to keep your company’s finances up to date, compliant, and ready to make strategic decisions.

Whether you are a small business in Adelaide or a growing enterprise across Australia, a professional bookkeeping service will save you time, stress and ensure you’re compliant with Australian Tax obligations.

Let’s learn more about bookkeeping.

What is Bookkeeping?

Bookkeeping is the process of recording, organizing, and managing all financial transactions of a company, including income, expenses, assets, and liabilities – in other words, every dollar must be accounted for.

Bookkeepers play an important role, ensuring all record-keeping is accurate, and they further underlie the accounting and financial report structuring process of the business. Bookkeepers will also assist in tax preparation and during an audit.

Types of Bookkeeping

There are three primary categories of bookkeeping systems that businesses typically employ based on their size, complexity, and financial needs.

1. Single-Entry Bookkeeping

The single-entry bookkeeping system is the simplest type of bookkeeping and is typically used by small or home-based businesses.

• Each transaction is recorded just a single time — either as a revenue or an expense.
• It operates similarly to how one keeps personal finances.
• This system is great for freelancers, sole traders, and very small businesses with a small number of transactions.

Example:

When you receive payment, it is recorded as revenue, and when you buy something, it is an expense.

2. Double-Entry Bookkeeping

The double-entry bookkeeping accounting system is the most popular and accurate bookkeeping system.

• Each transaction will affect two accounts — one debit, one credit.
• This robust bookkeeping system will keep the accounting equation (Assets = Liabilities + Equity) always stays balanced.
• This system is often used by medium to large businesses and those required to prepare formal financial statements.

Example:

When you purchase office supplies on credit, you will record an expense for office supplies (debit) and an increase to liabilities (credit).

3. Virtual or Online Bookkeeping

With the continued rise and ever-increasing applications of cloud technology, many businesses are moving to using online bookkeeping systems.

• It automates data entry, bank reconciliation, and report generation.
• Bookkeepers and business owners can access financial data anytime, anywhere.
• Platforms such as Xero, QuickBooks, and MYOB streamline the process while also being affordable.

Example:

Business transactions can sync automatically from your bank account into your online bookkeeping software to keep your transactions up to date in real time.

Types of Bookkeeping Services

• Manual Bookkeeping: This is the traditional method of bookkeeping where numbers are physically written in a ledger-book or spreadsheet, and it is best for micro-businesses.
• Online Bookkeeping: This is when you use an online cloud-based software (e.g., Xero or QuickBooks) that gives you real-time access and shared access to bookkeeping and other data.
• Outsourced Bookkeeping: This is when you hire a bookkeeping company or a professional bookkeeper, who works remotely to manage your books.
• In-House Bookkeeping: This is when you employ a bookkeeper in-house to manage your books.

What are the Services of Bookkeeping?

1. Recording Financial Transactions

This is the core service of bookkeeping. Every transaction that occurs within a business- sales, purchases, payments, and receipts- is properly recorded in the books or accounting software.

2. Accounts Payable Management

Bookkeepers are responsible for managing the company’s bills, vendor and supplier payments, invoices, and ensuring every bill is paid on time to ensure the company has a good rapport with its vendors.

3. Accounts Receivable Management

This is when the bookkeeper tracks what money is owed to your business by a customer(s); sending invoices, following up to collect late payments, or ensuring cash is flowing into your company.

4. Bank and Credit Card Reconciliation

Bookkeepers will regularly reconcile your bank account statements with your internal records to ensure there is no discrepancy or fraudulent transactions.

5. Payroll Processing

Bookkeeping services typically cover payroll handling: calculating staff wages, deductions, taxes, and ensuring payments are made punctually.

6. BAS and GST Preparation

Alternatively, bookkeepers assist with the preparation and lodgement of Business Activity Statements (BAS) and ensure compliance with Goods and Services Tax (GST), as required by the Australian Taxation Office (ATO).

7. Financial Reporting

A bookkeeper will generate key financial statements that provide insight into your business’s financial condition.

8. Expense Tracking and Budgeting

They will assist in establishing a system for categorizing expenses, keep track of numbers, and develop operational budgets to achieve efficiency and profits.

9. Software Setup and Integration

Accountants can install and maintain bookkeeping software (for example, Xero, MYOB, or QuickBooks) for you to use for online bookkeeping.

10. Tax Advisory Collaboration

Bookkeepers often work with tax advisors or tax consultants to help you set your business in compliance with tax obligations and remit your financial records for annual lodgment.

Why is Bookkeeping Important for Businesses?

• Financial Clarity: Have an accurate view of your cash flow, profit, and expenses in real-time.
• Tax Compliance: Avoid compliance breaches and penalties.
• Data Accuracy: More accurate with fewer accounting faults, and maintains clear and concise financial records.
• Time Savings: Outsource the financial daily workings; save your valuable time.
• Better Decision-Making: Use accurate financial data to plan budgets and investments.

Benefits of Hiring a Professional Bookkeeping Service

• Accuracy: Will guarantee your financial data is accurate and organized.
• Compliance: Will keep your business compliant with the ATO and other requirements.
• Cost Efficiency: Often, outsourcing is less expensive than employing a full-time employee.
• Strategic Insights: Access to reports and analytics will help enhance knowledge for decision-making.
• Peace of Mind: While you focus on your business growth, professionals take care of your bookkeeping.

Learn more

Final Thoughts

Bookkeeping is more than counting numbers; it affects the financial health of your business and future viability. Regardless of whether you’re a start-up or an established business, business bookkeeping services in Adelaide can simplify your bookkeeping and provide capital gain and income tax obligations compliance.

Relevant Read – 

Important Bookkeeping Tips For Startups

Bookkeeping Challenges Small Businesses Face and How to Solve Them

If you’re ready to move your bookkeeping to services, the experts at TaxConsult can provide reliable, low-cost bookkeeping and advisory services to meet your business needs.

FAQ

Q1. What is the formula for bookkeeping?

The standard bookkeeping formula is: 

Assets = Liabilities + Equity

Q2. How much does a bookkeeper usually charge?

The cost of bookkeeping varies per business size and service. On average, bookkeeping costs for small businesses range from $300 to $800 per month.

Q3. What is the difference between a bookkeeper and a BAS agent?

A bookkeeper manages daily financial records, while a BAS agent is registered with the Tax Practitioners Board and authorized to lodge Business Activity Statements (BAS) and handle GST compliance.

Q4. Should I hire a bookkeeper or an accountant?

Hire a bookkeeper for daily record-keeping and an accountant for financial analysis, tax planning, and strategic advice. Many businesses benefit from having both.

Q5. What is the difference between a bookkeeper and a BAS agent?

A bookkeeper manages daily financial records, while a BAS agent is registered with the Tax Practitioners Board and authorized to lodge Business Activity Statements (BAS) and handle GST compliance.