Good bookkeeping is the foundation of every successful business. It's not just tax compliance, it gives you the financial visibility to make smart decisions, secure funding and grow profitably. This guide shows you exactly what matters and how to do it right.
The 5 core bookkeeping functions
Recording all transactions
Every dollar in and out must be recorded: sales, expenses, supplier payments, wages, loan repayments and owner drawings. Missing transactions create inaccurate reports and tax problems.
Best practice
- Use bank feeds to import transactions automatically
- Reconcile bank accounts weekly, not monthly
- Keep digital copies of all receipts and invoices
Managing accounts receivable
Track who owes you and get paid promptly. Many businesses fail not because they're unprofitable, but because they can't collect what they're owed.
Best practice
- Send invoices immediately upon completing work
- Review the aged debtors report weekly
- Follow up overdue invoices within 7 days
Managing accounts payable
Track what you owe suppliers and pay on time to maintain relationships and capture early-payment discounts, but don't pay too early, manage cash flow strategically.
Best practice
- Enter supplier invoices immediately on receipt
- Schedule payment runs to align with cash flow
- Take early-payment discounts when cash flow permits
Payroll processing
Paying employees correctly and on time is non-negotiable: wages, super, PAYG withholding and STP reporting. Errors create legal liability and damage trust.
Best practice
- Use specialised payroll software or a service
- Process payroll at least a day before pay day
- Submit STP reports on or before pay day
Financial reporting
Generate regular reports to understand performance. At minimum you need a monthly P&L and balance sheet. These reports inform every decision.
Best practice
- Review P&L and balance sheet monthly
- Monitor cash flow forecasts weekly
- Compare actuals to budget quarterly