Top Bookkeeping Tips for Tax Compliance with Terrena
Keep those books ship-shape
The unending task of keeping your books in order can seem like a drag day-to-day. However, as the time for your EOFY tax return or monthly GST return approaches, you’ll be very glad of any time, money, or effort spent on careful bookkeeping.
Good recordkeeping is crucial for ensuring your business is tax compliant. Being tax compliant means peace of mind for a business owner—everything is squared away, your bills are paid, and there will be no nasty surprises coming your way from IRD.
How can you achieve that state of zen? Thankfully, there’s an expert bookkeeper on our team whose superpower is turning even the messiest of books into something organised and beautiful. We asked Terrena for her thoughts on record-keeping best practice; these are her top tips.
One: Don’t use your accountant to keep your books
We love a good accountant around these parts, but only for the high-level things: financial advice, annual tax return filings, and the like. You don’t want to pay an accountant’s hourly rate to do the day-to-day bookkeeping tasks! Additionally, the finer details of keeping records are generally not part of their toolbox of skills.
If you aren’t doing these yourself, we recommend finding a bookkeeper or VA who specialises in bookkeeping (like Terrena!). Someone with experience and expertise will get it done accurately and efficiently, taking that task off your plate and ensuring that your books are kept to perfection.
Two: Keep all receipts over $50
Keeping your tax receipts is necessary to claim expenses and reduce your tax bill. Expenses that fall under the $50 threshold should be recorded, but receipts are not required.
Accounting software makes it easy to take a picture, upload, and store receipts. Having them all sitting in your Xero or other software program also makes it easy to share with your accountant—simply give them a login.
Three: Keep all relevant info close at hand
It’s not just receipts you should store using your accounting software. Terrena recommends uploading any relevant documentation so it’s at hand and accessible. This might include subcontractor contracts, employee records, letters from IRD—anything you might need for proof or reference.
Four: Add your own notes for clarity
Write helpful notes in the field provided that explain why each document or receipt is relevant. Your future self will thank you! It’s extra important to do this for the small purchases without receipts attached.
Five: File from your accounting software
Terrena recommends using your accounting software functionality to file GST returns and PAYE, rather than compiling and submitting them separately. Xero and other softwares are designed to make this simple. Additionally, doing it this way keeps everything in one place and makes it visible on your dashboard, so it’s easier to keep track.
Six: Break it down daily
Don’t let your bookkeeping tasks pile up! Spending ten minutes a day uploading receipts and doing your bank reconciliations (or having your VA or bookkeeper do it) is the way to go, and will leave you feeling much more mentally prepared and on top of things.
Take it from someone who’s been there, done that with an array of different clients—small changes and a little bit of discipline can make a huge difference! Terrena has another piece of advice for business owners using a VA or bookkeeper to ease their load: always check over copies of the GST returns and PAYE returns they are filing. This is for your own peace of mind; SMEs can be and have been scammed by dishonest contractors.
Need some help keeping your books? Released has a team full of capable and experienced professionals who can not only take the daily tasks off your plate but take your systems from messy to majestic.
“Terrena has helped streamline a number of processes in our company and continues to impress with her dedication to the seamless running of the back end of the company.”
-Henry Dunham, Henry Dunham Building
“The organisation of my finances has gone from “overwhelming mess” to a
low-maintenance and reliable system that ticks along nicely.”-Stephen McConnachie, Think e-Learning
“Terrena, Aynsley, and the team at Released are a breeze to deal with. They have helped me get my office management under control, and I have complete trust in their system.”
-Gavin Barr, GBARR Construction
Book a 15-minute chat and let’s get the ball rolling!
