Running a small business often means juggling jobs, staff, and paperwork. It’s tempting to make decisions based on what you see in the bank account, but that doesn’t always show the full story.

To make confident, on-time decisions, you need accurate records and the right reports. we've spoken before about the reports Xero can generate for you, such as the Balance Sheet, the Profit and Loss report, and more. However every report is only as good as the data we give it. Your systems need to be checked occasionally to ensure the right data is going to the right place, and there's no hidden surprises for your tax agent or accountant. 

Time is of the Essence

Making sure your systems operate together to deliver your reports is critical to a functioning business. Using Northwest Accountancy's free Calendar, you can map out when regular payments and income is due. You should also be aware of the tempo of irregular payments, for example if your business has a quiet month, the supplier invoices might be lower, and then later in a busier month a higher invoice will come. 

If you know these details, you can use it to time payments, work out the length of your invoice due dates, and make your money flow more easily and with less stress on your side. After some time, you may also build a kitty to ensure big invoices can be met easily regardless of how many clients are overdue! 

Some businesses will want to check their finances and reconciliations daily, and others weekly or even monthly if you don't have a lot of transactions. But regardless, keeping time in mind when building your systems means thinking about: 

• Entering income and expenses regularly.
• Reconciling bank accounts so your reports reflect reality.
• Reviewing financial statements at least monthly.

With good habits, you’ll have information ready when you need it, not weeks later.

Who's Doing What and When?

Having your system clearly mapped out also means that every one knows exactly what they're supposed to be doing, and when. This is particularly important if you have accounting personnel, bookkeepers, and admin staff helping in the businesses' finances. 

If you have a regular system, it takes away the stress of uncertainty. Janine knows she needs to wait until Gemma has done her part; and they both know when everything is due to be completed. 
Managers will be better able to cover holidays and absenteeism, as they know what critical parts of the system are covered or will need to be covered. Go through your system and figure out what happens when each person is away, how will every one else recover, communicate, or complete their related activities? 

Write Your Procedures

This one is a big one. If you don't have procedures for your staff to follow, it's your fault if they get things wrong. 

I know, they're strong words, but if it was important, you'd have it written down. Then if the staff members are not following procedures, you have reason to work with them towards a clear improvement goal. However without the back up of clear, written procedures, anything goes, and you never know what problems can surprise you and the team. 

Most small businesses do not have written procedures, but they also don't have many staff. And that's okay! However if you're looking to expand, or keep staff, you will need to understand the workflow for delegation and management, and if you are hoping a quick chat over a coffee will get the admin completed... then we strongly recommend it's time to have a coffee with yourself and ponder if that's the most efficient use of everyone's time. 

This helps with absenteeism and team work again, as every one will know what needs to be done, by whom, and by when! Plus if every one is sticking to the plans, end of month and end of quarter work should be greatly reduced. What's not to love? 

Write Your Procedures With The End in Mind!

This has a whole new paragraph from the last because sometimes we lack focus when we're trying to build new systems and procedures in the business. It may be useful to have a procedure for greeting customers on arrival, but is that going to get your taxes done to compliance? 

Start with the important things first - what are external organisations expecting from you? Build procedures to ensure that accurate, current and timely taxes, documents, and reports get sent to the correct people first. Worry about internal benchmarks later. 

If you know that the procedure is designed to produce a BAS statement ready to submit to the ATO, it's pretty easy to check and know if it's produced the correct outcome. If it's not right, then sort out the system and procedure, and get it right! 

Here's a Handy Checklist for Tax Compliance Activities

Tax time doesn’t have to be stressful. Here’s a simple checklist you can use throughout the year:

• Reconcile all bank, credit card, and loan accounts.
• Review and write off any bad debts.
• Confirm GST coding is correct.
• Record depreciation on assets.
• Finalise payroll and superannuation.
• Gather receipts and documents for deductions.
• Complete a stocktake if required.

Doing these steps regularly makes year-end much easier and keeps surprises away. However did you know Northwest Accountancy has a free download of the checklist of documents we send our customers every year? Check it out here! 

You can use this checklist to see what is important when you're building your systems and procedures.

Easy Ways to Map Out Your Procedures

Pen and paper is always the easiest way to draw something complicated, and then you can edit it and draw a new one in seconds! Once you've created the idea of what your processes are, you can run it through your managers and staff to make sure that you all understand the role of the procedures, and that they accurately reflect the business activities and work that they do. 

There are many tools online for creating a visual map of your workflows, such as Canva Whiteboard, Visio or Miro. This also gives you a list of the documents you need to organise for each step of the compliance process. 

It may seem like a lot of work, but great procedures mean reliable, trusted data, and that means your reports and finances will be on point, correct and effective for your decision making requirements as a business owner. Having great data means it's so much easier to hand it over to the experts when you're ready - your accountants! 

If you're looking for growth-oriented support for your business, book in a chat with us today!