Bookkeeping Best Practice

One of the best ways to minimise your tax is still to ensure that all of your expenses are claimed.  The best way to ensure this happens is to make sure your bookkeeping is as good as it could be.

When I do my bookkeeping for my business, I do the following:

I have a dedicated business bank account and credit card so that there is never any need to pay for a business expense using cash or a personal bank account or personal credit card.  This ensures that when I prepared by GST returns from my bank transactions, I never miss a business expenses as they are all included in those bank transactions.

I have a folder where I hole punch and file my invoices and receipts in date order under two tabs, one for those paid from the business bank account and one for those paid form the business credit card.  This allows me to very quickly tick off the invoices to the bank transactions at the end of each year as a double check.

For any entertainment expenses, I write on the receipt who I met with and why.  I also ensure that no personal expenses are paid from the business bank account or business credit card to avoid confusion.  If, on a rare occasion, I use a personal bank account for the business expense, then I reimburse that amount from the business bank account.

By keeping things separate, clear and organised, you can minimise your tax, reduce the time you spend sorting out your taxes and even keep your accounting fees down.

Disclaimer: The above article is general in nature and we recommend you seek professional advice tailored to your specific personal situation.