Posted on 2 Comments

Bookkeeping Basics: Cash vs. Accrual Systems

Bookkeeping Basics apply to every cloud accounting platform: MYOB, Xero or Quickbooks (QBO)

lifelong learning platform woman online learning for life

BOOKKEEPING IS THE PROCESS of keeping accurate records of the financial affairs of a business, and every business operating in Australia, whether it employs staff or whether it’s owned and operated by a single sole trader, must keep their bookkeeping up to date.

Bookkeeping plays a key role in the lodgement of your tax returns and business activity statements. It can also provide valuable information on the financial health and performance of your business.

The bookkeeping process for a business starts the very moment you begin trading, so it’s extremely important that you set up a system for managing your bookkeeping early in the life of your business — ideally, at the same time that you’re setting up your other operational systems (email accounts, websites, invoicing, etc). We’ve included bookkeeping basics videos in our MYOB training course for several years already but now these basics are part of a separate guide!

ezylearn-bookkeeping-basics-training-course-workbook-logo

If you’ve never been self-employed before, just the idea of setting up a bookkeeping system is probably enough to strike fear in your heart, which is why we put together a free guide to setting up your own bookkeeping system, called Bookkeeping Basics, which you can download, for free, from the EzyLearn website.

The Bookkeeping Basics guide is an instruction manual on basic features and terminology used in every bookkeeping system, and will provide you with some good foundation knowledge of how your accounting software works, which you can use before you enrol in one of our cloud accounting training courses or find a good bookkeeper to take care of your bookkeeping for you.

Bookkeeping Basics Topic: Understanding cash vs. accrual accounting

The main difference between cash and accrual accounting is the timing of when when revenue and expenses are recognised. Although, the two methods are distinctly different from each other, there are many businesses that use a combination of both.

Cash-based accounting

A cash-based accounting system records transactions at the time the cash was paid or received, regardless of when the transaction occurred. With this method, if you get an invoice from a supplier, for instance, you won’t record the cost in your books until you’ve paid the invoice. By the same token, you won’t record a sale in your books until you receive the money from your customer.

Cash accounting is common among small businesses, especially contractors who work on small projects or are on weekly retainers with their clients, as it’s the simplest way to manage cash flow.

Accrual-based accounting

An accrual accounting system, on the other hand, recognises both income and expenses when the sale takes place, rather than when cash changes hands. When a web designer, for example, raises an invoice for a website they’ve completed, the sale would be recorded in their books, even though they haven’t received payment yet.

With accrual accounting, debtors and creditors are created in your accounting software, which shows what is owing to you and when, as well as what you owe others and when. This helps to give you a truer picture of your financial situation, in particular it helps you keep track of money you do and don’t have in real-time, rather than after the fact as is the case with cash-based accounting.

Which system should you use?

Before cloud accounting software, like MYOB, Xero and QuickBooks came along, a lot of small businesses used a cash-based accounting system simply because the alternative required a lot of grunt work, a lot of the time. Cloud accounting has made it significantly easier to set up and maintain an accrual-based accounting system — in fact, many small businesses that use a cloud accounting system often use this method by default, without even realising.

That being said, there are some things to consider when selecting a system for your business, such as:

  • The size of your business — i.e., will you be employing staff or using lots of contractors?
  • How complicated your business transactions will be
  • Whether you will have the resources to manage an accrual system.

Accrual accounting and GST

There is one last thing to consider, and it relates to GST. For small businesses whose annual turnover is less than $2 million, but greater than $75,000 per annum, they must register for GST and they may choose whether or not to register on a cash or accrual basis. (Businesses with an annual turnover of less than $75,000 are not required to register for GST, but may do so if they wish to.)

How you choose to register for GST will greatly affect your business’s cash flow. If you choose to register for GST on an accrual basis, GST will be payable on sales for which payment hasn’t been received yet, and could leave you out of pocket until your client pays you. That being said, GST can be claimed on unpaid expenses if you hold a tax invoice. If your business has a lot of expenses, this may balance out in the wash. If you run a leaner operation, however, it most probably will not, so this is something you should give careful consideration to.

This blog post is part of our Bookkeeping Basics series, which are being published to complement our new educational guide, also titled Bookkeeping Basics, which you can download for free from the EzyLearn website.

[box type=”info”] This blog post is part of our Bookkeeping Basics series, which are being published to complement our new educational guide, also titled Bookkeeping Basics, which you can download for free from the EzyLearn website.[/box]

Featured Mandurah (WA) Bookkeeper

deb-crompton-bookkeeper-from-mandurah-wa-local-myob-and-xero-portrait-smlIf you’re looking for a reliable bookkeeper to manage your daily or weekly bookkeeping and accounts, either remotely or in-person, Deb from Mandurah WA is a qualified bookkeeper with tertiary qualifications and the practical experience of having operated her own business in the past. Deb has a lot of experience in the day-to-day accounting functions of a small business and you can contact her directly as a fully licensed member from her profile page.

Our National Bookkeeping website has recently gone through a significant upgrade so watch out for more stories about featured bookkeepers in forthcoming blogs! Join and we can feature YOU in our articles too.

Start a bookkeeping business in your local area

Start a bookkeeping business not a franchiseMany bookkeepers starting a bookkeeping business for the first time also find it quite daunting; after all, they have moved from the corporate world where various and multifaceted aspects of running the business are managed by other people.

We put these bookkeepers through our EzyStartUp Course to help them define their goals, pricing strategies, marketing message and professional profile. They also get support from a business mentor and brand building from our digital marketing team.


 

Posted on 1 Comment

Is Xero really the easiest accounting software to use?

Xero was a market leader, but what do accountants think of it now?

xero cloud accounting software works on tablets phones and desktop computersWhen Xero was launched a few years ago, one of its selling points was that, compared with other accounting software – in particular, MYOB – Xero was incredibly easy to use, and it was also cloud-based, which meant you could access your accounts from any computer, any device, anywhere, anytime. This helped Xero to get a major foothold in the marketplace here in Australia, where MYOB had always reigned supreme.

But it wasn’t long before we started getting requests from bookkeepers and accountants for a Xero training course, in addition to our already existing MYOB training courses. It turned out that, as more businesses (tradies, for example) started using Xero because of its cloud functionality, their bookkeepers and accountants were finding that they needed training in some of Xero’s features and functions, despite Xero being billed as the easy alternative to MYOB.

Perhaps Xero isn’t that intuitive to use without a training course?

Since introducing our Xero training course, we’ve also noticed a significant upswing in enrolments, especially from bookkeepers, with many noting that the bank reconciliations and adjustments features in Xero are difficult to navigate. This got us wondering as to whether Xero really is that easy to use compared with MYOB, or whether it there might be an easier alternative out there, especially for small businesses managing all of their own accounts.

QuickBooks wants to be the small biz accounting software of choice

Since QuickBooks re-emerged in Australia, with full backing from their US-based parent company, Intuit, they’ve been cornering the small business market, with their inexpensive pricing plans and now by announcing a partnership deal with PayPal (paypal want you to be paid quicker) that enables a two-way flow of data between both QuickBooks and PayPal.

The QuickBooks-PayPal deal follows a similar union between Saasu and Westpac, which promises Saasu and Westpac customers with direct bank feeds to provide business owners with real-time insights into their cashflow. As one of the Big Four banks – and, quite often, the preferred bank for most Australian businesses – the union is hoped to give Saasu a leg up into the increasingly competitive cloud-accounting market, which saw the shuttering of the Australian-owned Reach Accounting earlier this year.

QuickBooks is well-placed to topple Xero

At more than half the price of Xero’s ‘standard’ plan (the starter plan at $25 per month is the most limited ‘starter’ plan I’ve seen), QuickBooks’s starter plan is already appealing to the money conscious small business owner; the PayPal deal only strengthens that.

Ever since PayPal spun off from eBay earlier this year, it’s been announcing new services that specifically target small business owners primarily doing business online – first by introducing inexpensive invoicing, card readers, and now by integrating with QuickBooks. As PayPal is the only online payment service operating in Australia, the two companies are now exceptionally placed to take the Australian small business market.

Perhaps losing the small business market isn’t a primary concern for Xero, which seems to be aligning itself to take the MYOB medium-sized business market, anyway. Regardless, QuickBooks is definitely a force to be reckoned with (forgive the pun) in the Australian cloud accounting space.

Join the wait list for our Quickbooks Online training course

We’re in the process of developing a QuickBooks training course, so if you’d like to register your interest to receive alerts and announcements about its progression, you can do so at our website. Alternatively, if you’re looking for training courses in either Xero or MYOB, you can enrol in either course online today and do your course over the Christmas and holiday season when you might have some time to do one while you reflect on your goals for 2016.

Posted on

Why Use a Bookkeeper?

Bookkeeping may be getting easier but do you really want to do it?

MYOB bookkeeper
You don’t need to be a BAS agent to be a successful and profitable bookkeeper.

EVEN WITH THE LATEST accounting programs, like Xero and MYOB Account Right Live making it easier for small business owners to manage their bookkeeping themselves, a bookkeeper is still an invaluable asset to any business. (It’s also the truth that, as much as companies like Xero tell you they make it a cinch to do your own bookkeeping, online account-keeping software programs are still complex and time-consuming to learn to use properly.)

We wrote a post recently about why contract bookkeeping is a good business venture for people looking to start a low-risk business. 

Here we certainly addressed the reasons bookkeeping is a good professional pursuit, but now it’s time to look at the benefits hiring a bookkeeper has to a business owner.

A bookkeeper makes a good, legal sense

The most obvious benefit, of course, is that by having someone to take care of your bookkeeping it frees you up to concentrate on the aspect of your business that you’re best at. But aside from being a legal requirement for every business to keep accurate records, it also helps you to monitor how well your business is performing.

A bookkeeper will work on your bookkeeping every week or even a few times a week, depending on your business needs, enabling you to monitor your daily income and expenditure, and if your accounting software has bank feed enabled, you can monitor it in real-time, too. This is crucial for businesses with many expenses or running costs – businesses that purchase stock or employ staff, for instance – to be able to manage their cash flow.

Paying a bookkeeper can save you money

But having your bookkeeping kept up-to-date also has other benefits, particularly in relation to regulations such as when you need to register for GST, and so forth. Here are five more benefits to your business if you hire bookkeeper to look after your books:

  1. Keeps your tax bill down: Businesses that don’t have someone taking care of their bookkeeping end up spend more with their tax accountant, so it’s really false economy if you think you’re saving money by going without a bookkeeper. It also potentially costs you money in other aspects of your business too, as you’ll find out.
  2. Can manage invoicing: Sure, it’s super easy to invoice your customers and clients now that most good cloud-accounting programs have apps for smartphones and tablets, but there are still plenty of businesses that don’t use the accounting apps on their phones or tablets because of the complex nature of their business. A bookkeeper can take care of this.
  3. To take care of your payroll: When you hire employees or sub-contractors, you’re entering a whole new realm of business. There are superannuation contributions, payroll tax, and a heap of other regulations that bookkeepers have to stay up on, but you don’t.
  4. You’ll avoid ‘late’ penalties: The ATO takes late lodgments pretty seriously, and the penalty for the late lodgment of a BAS or tax return can be up to $850 for each late lodgment. If you’re consistently late lodging your BAS or tax returns, then a bookkeeper basically pays for itself, because unlike fines or penalties, which are not tax deductible, the services of a bookkeeper are.
  5. Chasing unpaid invoices: The reality of running a business, unfortunately, is that a lot of people you’ll do work for won’t pay you on time. Chasing unpaid invoices is a delicate and time-consuming process, particularly when it starts to affect your cash flow and prevents you from taking on more work – buying stock or supplies, for example. It’s always a good idea to separate the face of business from debt collection. It helps keep the client relationship warm and fuzzy, while cash continues to come in the door.

Now that cloud-accounting programs have made it more possible for bookkeepers to work from home and contract their services to many different clients, making it easier and more affordable for small businesses to retain a bookkeeper.

— EzyLearn is Behind a New Bookkeeping Initiative 

find a local bookkeeper

EzyLearn now features the National Bookkeeping Directory, a service which connects businesses owners with bookkeepers, based on their business needs or location. If you’re looking for a qualified, local bookkeeper to manage your books, visit the National Bookkeeping website.

Alternatively, if you’re thinking of starting your own bookkeeping business, National Bookkeeping is looking for smart entrepreneurs to become licensees.

National Bookkeeping provides full access to the entire suite of EzyLearn training courses, including our MYOB training courses and Small Business Management Course, in addition to providing help getting business leads. For more information, visit the National Bookkeeping website or read the FAQs page.


 

Posted on

Get Paid Faster Using Your Mobile Phone!

get paid faster using your mobile phone
You can use your mobile phone to get paid – great for tradespeople as well.

No doubt about it, one of the biggest hurdles you face as a small business owner is managing your cash flow. A big part of this is ensuring your clients and customers pay your invoices on time.

Setting up email alerts to remind customers when your invoices are due is a great way to ensure you’re never – or at least, rarely – paid late, which we’ve written about on this blog and even cover in our MYOB training courses. Continue reading Get Paid Faster Using Your Mobile Phone!

Posted on 2 Comments

Zoho Books, You don’t want to be a high risk do you?

There’s always Zoho Books

Zoho Books and Bank FeedsYou may have a different opinion when it comes to paying your suppliers but I believe you should pay quickly. I’m talking mainly about service providers rather that product suppliers, but I think in small business it doesn’t matter.

Everyone loves to be paid on time and if you can get paid earlier, even better. It once took me 16 minutes to pay a supplier – OK, I was making other payments at the time, but still, it looked impressive.

I mention it today because one of my team told me that I was categorised by their accounting software as “high risk” and I wasn’t too happy – they use Zoho Books and it’s been recommended around here to team members who are just starting their own businesses as independent consultants. When I delved a little deeper I discovered that they offer automated bank feeds.

Zoho Books + Bank Feeds = Faster Reconciliation

We’re written about Zoho Books in several different blog posts about their free version which is ideal for virtual assistants, Zoho’s huge range of other cloud based software tools, and their fantastic automated tools to help you get paid faster and this time I was fascinated to learn about their banks feeds.

Zoho uses a company called Yodlee to enable Zoho Books users to get their bank feeds and they boast that “Zoho Books does not store any of your bank login credentials.“. This is a comforting feature in the cloud accounting wars that have erupted since MYOB started facing stiff competition online against SAASU, Xero and Quickbooks.

bank feeds in Xero and MYOB for faster bank reconciliationI wrote about the time saving features of bank feeds and showcased some of the training videos in our online MYOB Training Course. If you are interested there are two free training videos to help you understand bank feeds in MYOB as an overview and how to setup bank feeds in MYOB.

I discovered a great article by “Cloud Commentator” Sholto Macpherson at his Digital First blog where he wrote about all the different perspectives of modern day bank feeds and the opinions of ICB, Accountants and the software companies themselves. If you’re interested it’s an interesting and objective read.

Zoho Books is in the Clouds

Either way you look at it, the new online cloud based accounting programs give you the power to work from anywhere, the tools to get paid faster and the connectivity to complete your bookkeeping in much less time.

We offer bookkeeping training in our MYOB Courses, Xero Courses and Reach Accounting so please enrol with us, take advantage of our lifetime course access feature and 30-Day money back guarantee.

Posted on

Affiliate Marketing: Partner with Us to Start Your Own Business NOW

Start a Computer Training Business

start your own businessDo you want to start your own business? Perhaps a home-based business? At EzyLearn, we’re passionate about helping people follow their dreams and start their own businesses.

At the moment, we’ve got a host of opportunities available to people who would like to partner with EzyLearn and start their own home-based business with a focus on Bookkeeping. Continue reading Affiliate Marketing: Partner with Us to Start Your Own Business NOW

Posted on

Getting the Accreditation You Need for MYOB and Bookkeeping

MYOB bookkeeper
You don’t need to be a BAS agent to be a successful and profitable bookkeeper.

The reason many of our students complete our MYOB training courses is because they’re looking for a new job, and so we’re often asked if our MYOB training courses are accredited and whether they come with a certificate.

The answer to this question is a little more complicated than it may seem, and here’s why:

Continue reading Getting the Accreditation You Need for MYOB and Bookkeeping

Posted on 1 Comment

Is QuickBooks Taking on MYOB Online?

With the arrival of cloud-accounting software came the opportunity for old foes and new players to enter the accounting space, once dominated by MYOB.

We offer training courses in MYOB, because it’s still the most widely used software package by accountants, but we’ve also recently expanded our cloud-accounting courses to also include Reach Accounting and Xero; two new players to enter the accounting fray. Continue reading Is QuickBooks Taking on MYOB Online?

Posted on

So You Think You Can Be an Entrepreneur?

entrepreneur
Entrepreneurs are strong-minded individuals – but we’ve found there are at least 5 other qualities they tend to possess that leads to their business success.

In running our Small Business Management Course and MYOB Training Courses, one of most common reasons we find that people want to start their own businesses is to be their own boss and work remotely from home.

This is a perfectly understandable sentiment — but it’s not necessarily conducive to making a small business work.

Entrepreneurs are known to be people who manage starting up and/or bringing to fruition their own businesses and ventures, but entrepreneurs are a certain breed and as many find out the hard way, self-employment is not for everyone. Continue reading So You Think You Can Be an Entrepreneur?

Posted on 1 Comment

Working For Free: Why You Should Give With No Expectations

There are benefits in working for free, on occasion, in small business.
There are benefits in working for free, on occasion, in small business.

In a recent post we talked about the times when businesses should work for free, which we referred to as ‘added value’. We cover value-related exercises, such as determining and setting your prices in the module of the same name in our Small Business Management Course.

Sometimes working for no charge at all and outlining where this so (that’s important — people need to be informed that you’re doing something for nothing otherwise they mightn’t know!)  discourages hagglers and nuisance clients always looking for a discount at every opportunity. Continue reading Working For Free: Why You Should Give With No Expectations

Posted on 1 Comment

Are You a Bookkeeper? Find Clients Online FOR FREE!

It can be daunting knowing where to get your first clients when you start your own business.
It can be daunting knowing where to get your first clients when you start your own business.

The hardest part about starting your own business is finding the first few clients.

At EzyLearn, we love helping our MYOB training course students start their own bookkeeping business, but we’re even more passionate about helping you make that business a success Continue reading Are You a Bookkeeper? Find Clients Online FOR FREE!

Posted on

The EzyLearn MYOB Course Community

At EzyLearn we offer a handful of online training courses: Microsoft Office (Excel, Word, PowerPoint and Outlook), MYOB Accounting, and WordPress website design and blogging. There are many companies who promote courses online and that’s just what they do — promote courses online — but we try to be a little different.

Here’s why:

  • We offer only a handful of courses and we do them very well
  • Our courses come with LIFETIME Membership
  • As a student you receive fresh, new content without paying extra
  • Where possible, we provide real life exercise files so you can work with the software.

Our Online Community

Our experience with thousands of students has taught us that some students need more interaction than just the videos. They also like to bounce off other people to better understand the software they are learning.

That’s why we provide our Student Community and Tutor Support — to provide our students with the ability to communicate with fellow students, as well as ask questions of our experienced community moderators. It’s like having your own tutor that you can ask questions to who can provide quality answers based on their own experience in their relative industries.

Our students range from job seekers to small business owners and existing bookkeepers wanting to learn more, to accountants who may be thinking of leaving the corporate world and setting up a small business for themselves (or even seeking greater work-life balance).

Qualified Moderators

Our student support community is moderated by our MYOB Bookkeeper and Registered BAS agent, giving students the benefit of both communication with other course attendees (to socialise and to learn) as well as obtain answers to specific questions.

Annual Membership

Our Student Community and Tutor Support is provided on a yearly membership basis and you can continue or opt-out as you please each year. The service is available to existing EzyLearn students or new students enrolling into any one of our courses.

Posted on 1 Comment

Bumper Content: 10 Training Workbooks Included in our MYOB Courses!

With EzyLearn, in addition to the videos, you get over 200 pages of training information in our workbook.
With EzyLearn, in addition to the videos, you get over 200 pages of training information in our workbook.

When you’re selecting a training course provider, it’s important to consider the training material and resources you will need in order to complete the course.

There are many online institutions that don’t provide any training material beyond the information available in their training videos or learning management system. Continue reading Bumper Content: 10 Training Workbooks Included in our MYOB Courses!

Posted on 1 Comment

Bookkeepers: Stand Out from the Crowd and Become ICB Certified

You'll stand out by becoming ICB certified and BAS registered.
You’ll stand out by becoming ICB certified and a registered BAS agent.

Many of the students who take our MYOB training course in order to start their own bookkeeping business wish to then become certified with the Institute of Certified Bookkeepers (ICB).

How to Get ICB Stamp of Approval

Since 2006 the ICB has had a set of requirements bookkeepers must meet before they are permitted the ICB stamp of approval. Among these requirements – which also include possessing a Certificate IV in Financial Services (Bookkeeping) and personal indemnity insurance – all bookkeepers seeking to become certified with the ICB must possess a minimum of two years’ working experience.

For many bookkeepers starting out, getting that two years experience is a tough hurdle, particularly since the vast majority of bookkeepers in Australia are, according to General Manager of the ICB, Rick van Dyk, “independent sole traders”. “That’s why the ICB holds networking events at 59 locations around the country,” Rick says. “Because the best way to get the experience you need to become an ICB certified bookkeeper is to network with other bookkeepers.”

The ICB also holds online webinars each month, but Rick recommends attending networking events in person, because it provides you with more opportunity to network and get to know other bookkeepers.

Good Ways to Gain New Business

While it may seem like a lot of hoops to jump through in order to obtain membership to an organisation that’s voluntary, being an ICB certified bookkeeper does set you apart from the many other bookkeepers; it’s also a way of gaining new business, as the ICB is often the first port-of-call for many businesses looking for a contract bookkeeper.

But Rick van Dyk says that if your really want to stand out as a contract bookkeeper, become a registered BAS agent. “If you’re a contracting bookkeeper, you can look after a client’s data entry and do their reconciliation, but you’re not allowed to print any of the reports and advise your client on figures and so forth, as that contravenes the Act,”

Rick explains. There are currently about 9000 registered BAS agents in Australia, so there’s plenty of opportunity for bookkeepers to enter into this field by becoming a registered BAS agent with the Tax Practitioners Board.

Rick also offers this last piece of advice to budding bookkeepers-to-be: “Learn to use Excel; Excel still plays a very important part of the bookkeeper’s role, so it’s important bookkeepers know how to use it – fluently.”

***

You can find more information about out MYOB course here or our Excel course here. Alternatively, if you’d like more information about becoming certified by the ICB, visit their website.

Posted on 1 Comment

Should Your Final Price Include GST?

The price you charge for goods or services should always include GST.
The price you charge for goods or services should always include GST.

We are regualarly refreshing the content of our MYOB training course so that you can benefit from all the new information that is always coming in about being a bookkeeper, running your own bookkeeping business or doing the books for someone else’s business.

Pricing Your Services for GST Continue reading Should Your Final Price Include GST?

Posted on

Bank of Queensland not Using BankLink – and Others?

It appears not every bank is using BankLink.
It appears not every bank is using BankLink.

We wrote a post last year about a service called Bank Link, which we discovered is being used by a large number of accountants to reduce the amount of data entry involved in bookkeeping. Being that one of our most popular training courses is our MYOB training course and that many of our students are bookkeepers, we wondered what the bank link service would mean for the future of bookkeepers.

Bookkeepers Still Vital!

As it happens, we don’t believe that the BankLink service will make the role of the bookkeeper redundant, given that there is so much more to be being a bookkeeper than just data entry. In fact, we found that because BankLink eliminates much of the time-consuming data entry process, BankLink should be used by more bookkeepers.

Since the post on BankLink was published, however, we heard from one of our readers who told us that the Bank of Queensland does not provide credit card transactions data through BankLink. We thought this was unusual, so we decided to look into it a little further.

After doing a little digging, we discovered that BankLink is not available to be used with all banking institutions, and Bank of Queensland happens to be one of those institutions. We tried to contact the Bank of Queensland to find out if the BankLink service would be extended to their customers, however, we were unable to reach anyone able to give us any information as to if, and when, this service would be adopted.

***

For bookkeepers, or small business owners, even, who are customers of the Bank of Queensland this means that you will still need to enter your credit card transactions into MYOB manually. If you are aware of any other banking institutions that do not provide credit card data though BankLink, we’d love to hear from you — let us know in the comment section below.