How To Do Basic Bookkeeping for Small Business

February 20, 2024
minutes to read
Ben Mensah
Table of Contents

Learning how to do basic bookkeeping has always been pivotal for business owners to help make sure every penny is tracked and taken care of. These days, the evolution from manual and often tedious bookkeeping methods to innovative, automated platforms like Thriday has revolutionized financial management for small businesses. With Thriday, an AI-driven platform, you can simplify and automate bookkeeping to ensure financial management is streamlined, compliant, and effectively supports informed decision-making. This guide illuminates the path from understanding the essence of bookkeeping to embracing the ease and strategic advantages offered by Thriday in your business’s financial journey.

Bookkeeping Basics for Small Businesses in Australia

What is bookkeeping?

Bookkeeping is your business's financial heartbeat, tracking every penny that comes in and goes out. It's all about ensuring you know where your money is going and where it's coming from.

In the old days, this financial tracking was done with actual books and ledgers - and that's where the term 'bookkeeping' comes from! Transactions were noted in daybooks or journals and then meticulously transferred to a ledger.

But times have changed! Today, novel platforms like Thriday have replaced physical books, automating bookkeeping and accounting to make it much easier to track those dollars and cents without the paper trail. So, we're still keeping tabs on the finances, just in a more digital and easier way – leveraging the power of AI to eliminate financial admin!

Find out more about easily automating bookkeeping with Thriday here.

Why Bookkeeping Is Important for Small Businesses

Maintaining precise and orderly books is the initial step towards ensuring the smooth operation and sustainability of your small business. Here's why:

  • Organising Financial Data: Bookkeeping brings order to your financial data, ensuring every penny is accounted for and easily accessible.
  • Complying with the ATO: It ensures you're always in compliance with ATO requirements by maintaining detailed financial records.
  • Stress-Free Tax Returns: Come tax season, bookkeeping ensures you're not scrambling, providing a structured and accurate record of all financial transactions.
  • Effective Budgeting: It provides a clear view of your financials, making budgeting and planning for future expenses straightforward.
  • Managing Cash Flow: Bookkeeping keeps a vigilant eye on your cash flow, ensuring your business has the necessary financial resources to operate smoothly.
  • Transparent Reporting to Investors: It ensures you can provide clear and up-to-date financial reports to your investors.
  • Informed Decision-Making: With organised financial data at your fingertips, every business decision can be well-informed and data-driven.

Bookkeeping is the financial cornerstone for small businesses - guaranteeing structured data, adherence to regulations, seamless tax submissions, adept budgeting, robust cash flow, clear reporting, and informed decision-making. It's more than a mere task; it's a strategic ally, fortifying your business's financial stability and longevity.

Different Methods of Bookkeeping

Exploring the variety of bookkeeping methods can be a journey of its own. From timely and frustrating traditional manual methods to simple, modern AI-driven alternatives – let's examine the available options:

Manual Bookkeeping

This method involves manually keeping track of all financial transactions using a paper ledger or spreadsheet, like Microsoft Excel. If you are confident navigating the transaction reconciliation process, it can seem like a cost-effective option for small businesses with a low volume of transactions. However, the time wasted spent maintaining records in this manner will often outweigh any cost saving against the breadth of affordable software available these days, such as Thriday.

Accounting Software

Accounting software, whether off-the-shelf or tailored, can assist with various processes such as GST calculations, ledger updating, and invoice generation. It can also streamline payroll, BAS, and tax returns, ensuring compliance with Standard Business Reporting (SBR) and saving you time from manual reconciliation.

Cloud-Based Bookkeeping

Web-based bookkeeping systems store your financial records securely in the cloud, so they are available anytime, anywhere, on any device. They are often cheaper and simpler to use than traditional software, providing a seamless, integrated experience. Easily integrating your banking* with accounting directly in one platform - a novel solution offered by Thriday - allows for automated reconciliation of income and expenses and financial report generation, tax lodgement, instant invoicing, and more.

Thriday: A New Age in Bookkeeping

Thriday stands at the forefront of web-based bookkeeping; leveraging the power of AI, Thriday is a user-friendly app that directly integrates your banking* with your accounting to automate your bookkeeping needs as a small business owner - handling income and expense categorisation, transaction reconciliation, personalised tax deductions, financial report generation, and more.

As an all-in-one financial management platform, Thriday not only automates the bookkeeping process but elevates it by seamlessly integrating all of your financial information into one platform to provide:

  • Automated Accounting: Simply spend using your Thriday VISA debit card* and the platform automatically categorises your transactions, reconciles your accounts, and generates the financial reports you need to run your business, such as income and cash flow statements. With Thriday, your books are kept organised and up-to-date without any of the manual effort, time, and stress of the past!
  • Receipt Reconciliation: Scan, send, and save receipts on the go with Thriday. Snap a photo of your receipts, and the platform will automatically reconcile and store them, ensuring they're readily available for those valuable deductions when tax season arrives.
  • Instant Invoicing: Thriday also allows you to send invoices anytime, anywhere, and even schedule them for later - ensuring your invoicing process is not only accurate but also timely, improving cash flow and reducing administrative burden.
  • Lightning Lodgment: Thriday keeps you informed about upcoming, available, due, and overdue lodgments while also automatically creating the necessary reports for lodging within the platform. Effortlessly submit your BAS to the ATO in just a few minutes directly through the app. Learn more about BAS and tax lodgment here.

Thriday allows you to manage various financial tasks from a single platform so that running your business is simplified and integrated, providing a holistic view of your financial health.

Thriday doesn't just keep your books; it transforms them into a strategic asset, providing insights and facilitating informed decision-making.

Thriday automated categorisation
Understand your business' finances with more clarity and quicker than ever before with Thriday's automated bookkeeping and accounting platform

Essential Tips for Streamlined Bookkeeping

1. Establish Dedicated Business Bank Accounts*

Avoid the hassle of sifting through mixed personal and business transactions by establishing separate business accounts. With Thriday, your business transactions are clearly separated and automatically categorised and reconciled, ensuring clarity and ease of access to vital financial data. Find out more about the power of business banking* with Thriday here.

2. Allocate a Budget for Tax Obligations

Prevent tax season surprises by setting aside a portion of your income for tax obligations. With automated accounting and smart GST recognition, Thriday uses your transaction data to provide a constantly updated estimate of your tax position so you always know what you're up for. And with up to 9 transaction accounts*, it's easy to separate funds and put money aside to ensure you're prepared when the taxman comes calling.

3. Maintain Organised Records Consistently

Maintaining daily records is fundamental for accurate bookkeeping. While keeping records tidy used to be a pain, Thriday takes the burden off your shoulders by automatically reconciling and storing your receipts and transactions, ensuring they're organised and easily retrievable whenever needed.

4. Monitor Your Expenses Closely

Tracking expenses is simplified with Thriday. By automatically categorising your bills and expenses and even calculating personalised tax deductions, Thriday helps ensure that every penny is accounted for.

5. Ensure an Audit Trail is in place

While manual bookkeeping demands a clear audit trail, Thriday effortlessly maintains a digital trail of all your financial activities, ensuring that every transaction can be traced back seamlessly, providing accuracy and transparency.

6. Manage Your Accounts Receivable Effectively

Ensure your cash flow remains healthy by managing receivables diligently. With instant invoicing, you can keep track of due and overdue payments, offer customers early payment incentives, and set up automated payment reminders if necessary, ensuring your cash flow remains unaffected.

7. Be Mindful of Tax Deadlines

Tax deadlines need not be stressful anymore. Thriday can remind you about any upcoming or overdue BAS lodgments so you can submit them easily and timely through the app – the same goes for your tax records at the end of the financial year. Make tax time, relax time!

Closing Thoughts: Making Bookkeeping a Breeze with Thriday

Diving deep into the world of bookkeeping, we've journeyed from the mind-bending manual methods of the past to the slick, automated digital platforms of today. With its intelligent, integrated, and user-friendly design, Thriday emerges as a tool and a comprehensive ally for small businesses in Australia, reshaping the landscape of financial management and bookkeeping.

Thriday is more than a platform; it's a CFO in your pocket, turning what used to be a headache-inducing chore into a straightforward, even enjoyable task. Imagine having all your transactions, receipts, and financial reports safely stored and automatically organised, categorised, and analysed - ready to go whenever you need them. That's Thriday – your personal financial organiser, analyst, and reporter all rolled into one!

Thriday all-in-one platform
Thriday's all-in-one financial management platform is a game-changer for small business bookkeeping

From the effortless capture and reconciliation of receipts to the timely dispatch of invoices, Thriday helps you keep the financial elements of your business meticulously managed and always readily accessible. And when tax season rolls around? Thriday's there to make sure everything's in order, with financial reports automatically prepared and ready for lodgment without the frantic last-minute scramble.

With Thriday, bookkeeping is no longer a daunting task but an easy, insightful, and empowering part of your business's success journey that can be done with the click of a button.

Hear about the Thriday era from our happy customers here and eliminate financial admin today!

DISCLAIMER: Team Thrive Pty Ltd ABN 15 637 676 496 (Thriday) is an authorised representative (No.1297601) of Regional Australia Bank ABN 21 087 650 360  AFSL 241167 (Regional Australia Bank).  Regional Australia Bank is the issuer of the transaction account and debit card available through Thriday. Any information provided by Thriday is general in nature and does not take into account your personal situation. You should consider whether Thriday is appropriate for you.

Why waste time on financial admin when Thriday can do it for you?

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