Have you spent any time looking at this foundational accounting formula? It’s a formula that shows how wealthy you are – what your worth.
If you are a property owner you would be smiling because of the increase in home values since Covid – and for the last 30 or more years in Australia!
Continue reading Your Equity = Assets – LiabilitiesLike most financial reports they don’t tell the full picture by themselves.
I wrote about the messy startup for Jerry’s new business venture. It is used in the BAS Courses for QuickBooks, MYOB and Xero and in The Next Quarter case study you’ll see the results of Jerry’s business decisions and how some of his financial transactions have turned out.
You’ll get enough information from the financial reports to advise Jerry how to make future decisions for his business – particularly when it relates to cashflow, credit management and purchases.
In The Next Quarter Bookkeeping Course case study we look at Jerry’s financial reports and start to keep better track of income vs expenditure as well as better ways to use his money (like buying assets vs paying off loans).
Jerry will also have the knowledge to make product and services decisions because he’ll know what is selling well and where he is making more profit.
In The Next Quarter we look at how his business gets discovered online and what other digital marketing options are available to him.
We explore whether he should continue to use a project bidding site like HiPages or focus on getting more traffic to his own website.
Ultimately, no matter which digital marketing medium you use you’ll want to strengthen your sales skills to learn how to identify ideal clients and turn them into customers. At the same time you’ll want to learn how to help clients who are not ideal.
Cashflow is critical for the survival of a business. It’s like the blood pumping through the veins or the air going into and out of the lungs and without enough positive cashflow you don’t have a business that can survive.
This case study is used in our Advanced Certificate in Xero Cashflow and Financial Reporting Course.
People often ask “How long does it take to complete a Business Activity Statement” but there are several different correct answers to that question.
If all your transactions are entered correctly in your accounting software and your bank account is reconciled the BAS Lodgement takes a matter of minutes.
The hard work is often completed by bookkeepers who do the daily data entry or the catchup bookkeeping to make sure all the data is captured. This task can take days or even weeks!
If you want to save money you can lodge your BAS yourself and use our BAS Course workbooks to learn how to do it.
Learn how to lodge your BAS, including simple payroll wage payments using our Xero BAS Course training workbooks and sample data.
We use Jerry’s Messy Startup case study and you will be his bookkeeper to make sure everything is accurate for lodgement.
It is assumed that you know how to perform daily data entry and bank reconciliations using Xero.
The tricky part of lodging Business Activity Statements is making sure you get the correct tax codes for GST transactions and payroll. If you get these codes wrong you could end up paying less tax to the ATO than you are supposed to or even underpay your staff.
The difference between a BAS Agent and a junior bookkeeper is the compliance requirements to make sure they get it right. A BAS Agent has a duty of care to ensure that the correct tax codes are used and the Cert IV in Bookkeeping and BAS Agent skillset courses (which are Nationally Accredited) take students through the legal framework around compliance.
When a Registered BAS Agent provides these services as a contract bookkeeper they are providing a BAS Service and that is administered by the Tax Practitioners Board.
A BAS Agent is trained but more importantly insured to ensure they get the information 100% correct – otherwise they can be sued. That means they have to have Professional Indemnity insurance to provide BAS Services to clients.
If you want to start your own bookkeeping business and provide BAS Services you need the Cert IV in Accounting and Bookkeeping Course.
In most circumstances where you are completing the BAS as an employee you will be working under the supervision and direction of the business owner, business manager or the bookkeeper or accountant for that business.
Students who enrol into our BAS Courses simply want to know how to perform these tasks using accounting programs like QuickBooks, MYOB and Xero.
Financial reports reveal the financial state of a business and there are a bunch of standard reports for very specific parts of a business. The most common ones are the Profit and Loss Report and the Balance Sheet but they are more often referred to as Statement of Financial Position (Balance Sheet) and Statement of Profit or Loss .
If you’re a subscriber to this blog you’ll recall that I wrote about Xero’s 2023 financial report and how they announced a big loss yet their share price sky rocketed. There’s a lot involved in financial reporting and sometimes a business is more valuable if it is growing quickly than if it makes a loss, particularly if that loss is caused by one off items and helps contribute to future growth.
Continue reading Need to Learn How to Read Financial Reports?
