There is absolutely no doubt that business owners, especially those with small businesses should have a firm understanding of the basics of accountancy and bookkeeping. This is not to suggest of course, that they should be able to set themselves up as accountants in their own right, or indeed that they should be attempting to take the place that should rightly be filled by an accountant in their own business, but far too many business owners totally abdicate all responsibility for their business finances and hand it all over to their accountant, without the slightest idea what he will do with it.
This state of affairs is a very dangerous way to run a business of any size; a good business owner should be able to sit down with his accountant and discuss things, and understand what he is being told. Read more
Ok, for those small business owners out there who think you do not need an accountant because you have the latest version of Quicken or financial software, think again. For those few select business owners that actually are proficient in accounting and book keeping and are happy with your business the way it is… Read more
Management accounting is the technique of gathering and recording information which aids the decision-making capability of management. Indeed, management accounts can help management and business owners make better operating and strategic decisions. Furthermore, banks and other financial institutes sometimes require management accounts on a regular basis to assess their continuing lending terms and conditions.
A good management accounting process is one that helps to tackle four key aspects of a business:
The following are ways in which management accounting can help a business:
It provides accurate information related to the budgeted and actual figures, thus enabling the managers and business owners to take proper cost controlling measures.Provides timely feedback related to current operational activities, therefore helping in reassessing the operational decisions and gaining better control over the activities of the business.Assists in measuring the performance of various departments and sub- units within an organisation. Read more
Even though the GST has been in effect since 2000, there are many small business owners still making common errors. In the majority of cases, these mistakes have to do with people over-claiming their GST credits.
In order to avoid some of the more common GST pitfalls, you should keep it firmly in mind that the GST is a ‘transaction based’ tax, which means you should be trying to analyse every transaction to figure out the right GST action to take.
Below are some common GST pitfalls you should try to avoid.
Claiming GST without Valid Tax Invoices
If you’re registered for GST and hold a valid tax invoice, or recipient created tax invoice, you can claim a GST credit for purchases you made that cost you more than $82.50. Read more