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Course Curriculum

Bookkeeping Whats and Whys?

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Understanding why you need to do bookkeeping and knowing what you are aiming to achieve, is helped by using the system that suits you as an Australian sole trader. This sets the scene for learning about income and invoicing, expenses and receipts.

If you don't understand the whats and whys, you can't do your bookkeeping effectively - you'll be making mistakes, possibly ending up not tax compliant and open to being questioned by the ATO.

Knowing what's expected of you and how to go about it efficiently, can avoid lots of hard work for nothing.

1. Understanding what the ATO expects:

1.1 What does the ATO expect from me and should I be scared?Identify exactly what the ATO expects from you.• What the ATO is• What to consider when thinking of a record keeping system• The basic things you need to do with regards to bookkeeping compliance• What the ATO expects you to be.

1.2 What does my Accountant need?Identify exactly what your accountant needs from you.• What your Accountant needs• How ATO categories impact your bookkeeping• What business documents your Accountant needs to see• What to consider when your Accountant recommends software.

1.3 Why do I keep “books”? What do I achieve?Recognise why compliant bookkeeping is essential in helping my business succeed.• Why you keep “books”• How good business records help your business.

B O O K K E E P I N G W H A T S A N D W H Y S ?

2. Structuring your business:

2.1 Am I the right business structure?Recognise the differences between the 4 main business structures in Australia• What to consider when deciding on an appropriate business structure for

your business.

2.2 Are my personal assets protected by the business structure?Understand if your personal assets are protected by your business structure.• If your personal assets protected by the business structure• When assets are not protected under a company structure

2.3 Am I running a business or is it a hobby?Identify whether you're running a business or a hobby.• If you are running a business or a hobby• What you need to do if it’s a business.

3. Registering for tax compliance:

3.1 What is an ABN and do I need more than one?Identify fake ABN’s, decide how many ABN’s you need and how to get one for free.• If a business has a tax compliant ABN• The difference between an ABN and a registered business name.

3.2 Am I registered for GST? When do I need to be registered for GST?Decide whether and when to register for GST. Know how to identify if a business can legally charge you GST.• If you are registered for GST• When you need to be registered for GST.

4. Using the right bookkeeping systems:

4.1 What is the difference between “single entry” and “double entry” bookkeeping?Recognise the difference between single entry and double entry bookkeeping.• What is meant by single and double entry bookkeeping.

4.2 What’s the difference between “cash” and “accruals” accounting?Recognise the differences and complexities between cash and accruals accounting methods.• How cash and accruals methods affect the way you enter your invoices and

when you pay your taxes.

B O O K K E E P I N G W H A T S A N D W H Y S ?

4.3 Are bank feeds suitable for my business?Recognise if bank feeds are suitable for your business.• If bank feeds will save you time.

4.4 What is the cloud? Are my records safe in the cloud?Understand what cloud computing is and the positives and negatives of using it.• The advantages and disadvantages of cloud computing• How do I check if a website is secure.

5. Keeping the right records:

5.1 What records do I need to keep? What are source documents?Identifying source documents and which ones you need to keep.• What a source document is• What proof of purchase is• What written evidence is• What to do if you don’t have a source document.

5.2 How long do I need to keep my records?Know how long you need to keep records.• How long you need to keep your records• Exceptions to the general rule

5.3 Is it ok to keep electronic records?Know how to store records legally.• If it’s ok to keep electronic records• Why you need to backup electronic records• What the advantages are in using an electronic record keeping system

Expenses and Receipts

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Understanding what you can claim and how to record it correctly is much easier when you understand the rules. It's not one size fits all.

If you don't understand what you can correctly claim as tax deductible expenses, means you are a target for ATO audits and fines. You could be missing out on claiming more than you currently are and paying more tax than you should. You don't have to cut costs, you just need to change your methods.

6. Claiming expenses:

6.1 What expenses can I claim?Identify expenses that are specific to your industry and business.• Business expenses you can claim• Refreshment vs entertainment.

6.2 What is a tax deductible expense and when can I claim them?Recognise what expenses are “tax deductible” and when they should be claimed.• What a tax deductible expense is• When you can claim them• What you can’t claim.

6.3 How do I categorise an my expenses?Understand what's important to consider when categorising your expenses.• Why you categorise expenses• What categories you should use for your business.

6.4 How do I enter expense records correctly?Be able to enter expense records, knowing what's important to get right• Entering unpaid purchases• Entering spend money

7. Calculating part business and part personal use of expenses (including working from home:

7.1 How do I calculate expenses when it’s part business use and part use for personal(including working from home)?

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E X P E N S E S A N D R E C E I P T S

Be able to calculate business percentage usage as per the ATO’s recommendations• Which expenses are part business and part private• When a business is considered “home-based” and what expenses you can

claim• How the ATO suggests you calculate each portion and the records you need

to support these calculations.

7.2 What is the best way to calculate motor vehicle expenses?Understand how a log book assists you to calculate business use of a motor vehicle and decide which method of claiming a deduction is best for you.• What you need to consider before deciding which method of claiming you

can use• What you can claim• How to calculate business vs private use using a logbook.

7.3 How do you enter records with only part business use?Understand the methods available and when and how you should enter combined business and personal spending.• What method of entering suits your system and business best.

8. Calculating and entering GST:

8.1 What is GST and how do I know if I have been charged GST on an invoice?Be able to recognise if GST has been charged and charged correctly.• Which invoices will contain GST• How to calculate GST• How to identify if a supplier is registered for GST and if they should charge

GST.

8.2 How do I record receipts that have GST and non-GST components?Be able to enter receipts with both GST and non-GST amounts• Which expenses typically have both GST and non-GST items• How to identify the amount of GST on a receipt• How to enter these receipts

8.3 How does GST affect my income tax and will this affect my decision to voluntarily register for GST?

Understand how GST affects your income tax. This can help you decide if you want to voluntarily register for GST.• Which amounts are used for calculating your income tax return• What you should consider if you have the choice for voluntary GST

registration.

Income and Invoicing

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Understanding how to invoice and record income correctly, and get paid, is essential to business survival.

If you don't know the tactics used to delay payment of your invoices, you could find yourself without enough cash to run your business and pay yourself. Understanding how to get this right will save you a lot of time and stress.

9. Creating invoices and getting paid on time:

9.1 How do I create a tax compliant invoice that gets paid on time?Be able to supply an invoice that has the correct information to minimise excuses for not being paid on time.• If you should supply an “invoice” or a “tax Invoice”• What information is essential on an invoice.

9.2 Should I enter my invoices before they're paid?Understand why it is important to record and track unpaid invoices.• The reasons why tracking the payment of your invoices affects you business

success.

9.3 What are the consequences of NOT being paid on time?Understand the hidden costs associated with not being paid on time.• How not being paid on time impacts your suppliers• The other ways it costs you.

9.4 When can I ask for my invoices to be paid?Identify the best payment terms for your business and your customers.• Should I sell to them• What are reasonable payment terms.

9.5 How do I ask for payment of my invoice?Know how to approach your customers when asking for payment of your invoices.• Customers expectations• Contacting customers• The conversation and follow-up• Debt collectors.

9.6 How can I get paid faster?Know what you can do to avoid late payment of you invoices.• Tips to get paid faster

I N C O M E A N D I N V O I C I N G

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10. Recording payments received:

10.1 When entering income, what date should I use?Identify the correct date to use when recording income.• Why the date used is important• How it impacts reporting periods.

10.2 Do I have to bank cash I’ve received or can I use it to pay for business expenses?Know how using cash affects your business.• How to deal with cash• The importance of keeping records.

10.3 How do I record deposits and part payments?Identify when deposits and part payment need to be treated differently.• When a payment is not income• How to record part payments• What your invoice should show.

10.4 Do I need to enter every transaction individually, or is there a shortcut?Identify when entering transactions in bulk is suitable.• Advantages of bulk entry• When it’s suitable to bulk enter• What else you should consider when bulk entering.

10.5 Are commission statements and RCTIs different to invoices?Understand why commission statements and RCTI’s are an alternate source of income reporting.• Who can create a RCTI• How they are different to invoices.

10.6 How do I record income when expenses and fees have been deducted?Be able to enter the income and expenses correctly including GST if applicable.• How to enter these records• What else you need to aware of when entering deductions.

11. Dealing with bad debts and refunds:

11.1 What do I do with refunds and credit notes?Identify when a credit note is given and why and how to record it.• What a credit note is• Why you would issue a credit note rather than give a refund.

11.2 How do I record bad debts?Identify when an amount of money owed to you is considered a bad debt and how you write it off.• Who can have a bad debt• How you account for amounts that are not recoverable.

Reporting and Filing

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12. Correcting Entries:

12.1 Do you know what needs to be considered when correcting errors?Understand how making changes will affect your records.• What mistakes can be made• How and when to correct them.

13. Dealing with regular reporting requirements including BAS:

13.1 What is a bank reconciliation and do you need to do one?Understand when and why you reconcile accounts.• What reconciling means• A simple way to reconcile• When bank reconciliations are necessary• What to look for if you don’t balance.

13.2 What is a BAS and do I need to do one?Understand what a BAS is, who needs to lodge one and when.• What’s unique about your BAS• Standard due dates• Lodging online• Managing payments.

13.3 Which categories need to go on my BAS and which get excluded?Understand which categories are reported on a BAS and which ones are excluded and how to avoid common errors.• The difference between cash and accruals reporting• How to check for mistakes before you lodge your BAS• What should and should be included on your BAS• How to correct errors on already lodged statements.

13.4 What do I need to do at the end of each tax reporting period?Know ATO tax reporting periods and the processes that take place to finalise a period.• Dates for the Australian financial year• Dates for quarterly reporting and when this needs to be lodged by• The processes to follow at the end of tax reporting periods.

R E P O R T I N G A N D F I L I N G

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13.5 What's the difference between registered agents, accountants and bookkeepers?Know who can legally charge a fee for tax related services.• Tax agent vs Accountant• BAS Agent vs Bookkeeper• What questions you should ask when shopping for an accountant.

14. Using bookkeeping reports to run your business efficiently:

14.1 What reports do I need and why?Understand the importance of producing reports that you understand and that are relevant and useful to your business.• How and why reports help run your business• Which reports tell you what.

14.2 Why do I need to know the difference between assets, liabilities, income and expenses?

Know the definition of the terms income, expenses, assets, liabilities and equity and why it is important to classify your accounts correctly.• Categories belong to a classification that are used to generate reports that

analyse your business.

14.3 How do I know when I can pay myself and my bills? Do I need to use a budget andcashflow?

Understand that planning your spending can help to avoid strain on your available cash.• What a budget is• What a cash flow is• When and how much you can pay yourself.

14.4 What’s the best way to file my records?Understand the importance of systematic filing and procedures.• Why filing with a system saves you time• How to efficiently and consistently file your records• How to find records easily.

15. Stocktakes:

15.1 Why do I need to do a stocktake?Know why it is necessary to do a physical stocktake.• How to calculate your closing stock• Understand whether stock is an asset or an expense• How your business can benefit from regular stocktakes.