Resources from Business Victoria seminar on how to avoid overlooking your business recordkeeping.

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Welcome
Introduction to Seminar
What do you hope to learn in the next two hours:
Burning issues?
Topics of interest?
Opportunity to network
Have fun!

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Benefits of good record keeping include:
Saving you time.
Meet compliance requirements.
Information on how much is spent.
Detailed sales information.
Producing reports quickly and easily on:
financial performance
cashflow
collection from customers
stock management
Providing focus on the important financial aspects of
your business.
Keep Your Business on Track

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Business records can be kept:
Manually
Computerised on a spreadsheet
Using a specialised financial system
Tips on keeping business records:
Easy to use and complements your
business
A series of straightforward,
manageable tasks
Access and update them on a regular
basis
Keep Your Business on Track

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Topics for today’s seminar
Keeping business records
Book keeping basics
How to choose a financial management system
Cloud based accounting systems
Implementing financial controls
Developing policies and procedures

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Business Record Keeping
What business records should you keep?
Financial records
Customer and supplier contact details
Legal documents
Contracts and insurance agreements
Your lease, if you're renting
Licenses and permits
Employee records
Time sheets, copies of pay slips etc.

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Business Record Keeping
Employee records
Time sheets, copies of pay slips etc.
Safety records
e.g. risk assessment for occupational health and
safety
Accreditation records
Any other 'business activity’ records e.g. a
food safety plan, if you own a cafe

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Financial Records
Copies of invoices and receipts you issue
Invoices or bills for goods or services you purchase
Employee payments including payments made on
behalf of employees e.g. super funds, PAYG tax
Financial statements including profit and loss
statement and balance sheet
Tax return information
Bank account and credit card statements
End of year stock take records, assets register etc.

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Business Record Keeping
The key to success is:
Accuracy
Easy to access
Filed logically
Quick to use
Implementing procedures on record keeping
Provides useful information that will assist in
more efficient and effective business operations.
Search “Business Records” on ATO website www.ato.gov.au to ensure you
are complying with all ATO requirements

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Business Record Keeping
Imagine if your business premises were totally
flooded and you need to operate from alternative
premises until repaired – what business records
would you need?
Turn to Appendix One on page 20
and review the critical information
list.
Now complete the table on page 7.

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Bookkeeping Basics
Let’s complete the list on page 8.
Bookkeeping is the process of recording
financial transactions for your business
What financial information do you need in your
business?

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Bookkeeping Basics
Records for:
Compliance
Tax
Accreditation
Industry regulation
Performance
Profit and Loss Statement
Financial Health
Balance Sheet
Financial Plans
Budgets
Forecasts

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Profit and Loss Statement
Summary of income, costs and expenses
Also referred to as:
Income statement
Revenue statement
Statement of performance
Reflects past performance of your business
Tracks how a business is performing

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Profit and Loss Statement
Equals
Gross Profit
Less
Expenses
(Fixed & Variable)
Cost of Goods
Sold
Less
Net Sales
Net Profit
Equals

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Balance Sheet
Shows the financial position of the business at a point
in time.
Items listed in terms of immediacy – short term and
longer term.
Prepared at least once a year at your balance date
and usually monthly.
Used to analyse the financial health of the business.
Shows the net worth of the business to the owners.

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Balance Sheet Hint
Assets
$122,400
Liabilities
$101,200Funded
Through
Shareholders’
Funds
$21,200
This diagram shows
how the Balance Sheet
works

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Balance Sheet Classifications
Current Assets
All assets that will be turned into cash within 12 months
Current Liabilities
All liabilities that have to be repaid within 12 months
Non Current Assets
All assets other than current assets
Non Current Liabilities
All liabilities other than current liabilities

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Chart of Accounts
A listing of all the accounts needed to cover
the financial transactions of the business.
Used to separate different items to provide
more useful information.
Most accounting software has pre-defined
chart of accounts which you can add to.
If unsure, use a bookkeeper or accountant to
help you set up a chart of accounts.

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Chart of Accounts
1. What type of financial information will you need
(including grouping)?
2. Define the various accounts such as different
classes of assets, liabilities, expenses and sales
revenue.
3. List the different type of accounts for assets,
liabilities, sales revenue and expenses.
continued on next slide

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Chart of Accounts
4. Allocate a numbering system for each account.
5. You can allocate various sub accounts under
these main accounts.
6. Depending on the level of information you need,
each sub account may need further sub accounts.

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Chart of Accounts
Sounds confusing so let’s look at the
example on pages 10 & 11.

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Benefits of using a bookkeeper
Saves money
Saves time
Accurate record keeping
Ensures compliance
Confidence
What are some questions you should ask
your bookkeeper?
Complete the table on page 12

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Choosing a Financial System
Understand what
information you need
What will help with the
business operations?
Will it provide
competitive
advantages?
Complete the table on page 13 to help decide
what you need from your financial system.

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Cloud Based Accounting Systems
What is a cloud based system?
Could totally change the way you do business.
Are extremely safe to use – the software
provider’s business reputation depends on
privacy issues.
Accessible where ever you have internet.
Provide up to date information immediately.

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Cloud Based Accounting Systems
Increase your profits
Regular subscription fee includes upgrades,
system administration, maintenance, regular
support, user licences etc.
Save on staff expenses and training as processes
are more automated and most systems have
online training provided.
Back up costs are considerably reduced - there is
no need for physical and/or off-site storage.
The need for hardware and servers are greatly
reduced, saving on repairs and maintenance.

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Cloud Based Accounting Systems
Keep the cash flowing
Review all banking information in one place at any time.
Monitor the financial position of your business easier and
quicker.
Invoicing and payments can be made from anywhere at any
time.
Projects tracked in real time and monitored against budgets.
Staff can update information immediately – no more clients
exceeding credit limits.
Integration with other systems ensures that all sales records
are kept up to date and cash can be collected quicker.

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Cloud Based Accounting Systems
Improve productivity
Mobility will increase efficiency:
by staff through easy collaboration within your team
with your bookkeeper or accountant
others involved in your business where ever they are
based
Up to date information to enable quick and reliable
decision making, providing scope to respond
quickly to changing business conditions.

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Cloud Based Accounting Systems
Free up time
Automates manual processes such as direct data
entry from your bank accounts.
Supports expanded delegation within your
business as the systems have good security
accesses and internal controls.
Flexibility and reliability will mean less time spend
on IT and staff issues.
Information at a push of button, in easy to read
formats.

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Cloud Based Accounting Systems
Disaster Recovery
Higher reliability to provide regular back-ups.
Automation reduces the probability of losing
important information.
Back-up data is usually a quick and easy process.

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Implementing Financial Controls
Systems of policies and procedures that:
Safeguard assets.
Ensure accurate and reliable financial reporting.
Promote compliance with laws and regulations.
Achieve effective and efficient operations.

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Implementing Financial Controls
Why?
Help align the performance of your business
with your overall objectives
Encourage good management
Ensures proper financial reporting
Safeguard assets
Deter and detect fraud and error
Reduce exposure to risks

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Implementing Financial Controls
Sound financial controls will include procedures for:
Handling funds received and paid.
Preparing appropriate and timely financial
reporting.
Evaluating the performance of your business.
Evaluating staff and programs.
Maintaining inventory records of property.
Some areas of the business are more at risk of loss
or fraud and require more stringent controls.
A checklist of financial controls is provided in Appendix
Three on page 32.

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Implementing Policies and Procedures
Ensures business records are kept accurate and
compliant.
Good policies and procedures will:
ensure the business runs smoothly and in line with
the owners wishes.
provide a framework for informed decisions to be
made in the business.
ensure that everyone in the business understands
the best way to handle a situation and that
everyone does this in the same way.
provide common understanding and agreement on
how things should be done within the business.

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Policy
A statement that outlines the principles and views of
the business on each topic covered.
It is an overview of certain rules you should have in
your business.
Your policies should:
align with business goals and plans
reflect the culture of the business
be flexible
be easily interpreted and understood by everybody in
the business

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Procedures
Clear and concise instructions on
how to abide by the policy.
They detail the sequence of
activities that are required to
complete tasks.
Should include the
'how to' guidelines to
achieve the necessary
results.

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Procedures
Procedures should be:
Factual, simple to understand and succinct.
Written in a step-by-step style.
Include references or links to any related documents and
forms that need to be completed.
In the best format for their purpose
e.g. a procedure could be presented as written steps, a flow
chart, checklist or photos or pictures.
continued on next slide

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What Policies and Procedures?
Authorisations
e.g. which job roles are allowed to authorise various activities
within the business?
Bank accounts
e.g. when and how new bank accounts are opened
New suppliers and how to choose them
New customers and how to manage them
Buying and purchasing
e.g. how to determine when stock, equipment and assets need to
be purchased.
Debt collection
Insurance and risk management.

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Tips for developing policies and
procedures
Let’s look at the policy example on page 18

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Today’ Top Tips
Good record keeping will ensure accurate records that are
compliant.
Business record keeping is more than financial information.
Spending time on your chart of accounts will make your financial
information more useful.
A bookkeeper is an investment, not a cost.
Understand what you need from a financial system before you
buy one.
Cloud based systems will improve your business in many ways.
Financial controls will reduce the worry of managing your staff.
Policies and procedures will improve the overall performance of
your business and free up time to do more important things.
For more help…check out www.business.vic.gov.au

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List 3 actions you will follow
through with as a result of this
workshop
Then
List 3 things that you’ve learned
in this seminar
List 3 actions you will follow
through with as a result of this
seminar
List 3 things that you’ve learned in
this seminar

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Business mentors help you to identify a clear direction
for you and your business.
Business mentors can also advise you on how to:
conduct market research
work out your break-even point
price and/or cost your products or services
develop an effective marketing strategy
use other business management tools
To arrange a free mentoring session with a business mentor
complete the evaluation form and select FREE Mentoring Session on
page 2. You will then receive an email with details on claiming your
free mentoring session.
FREE mentoring session

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Questions?
Thank you for attending
Check out
business.vic.gov.au/events
for more workshop information