Australian and New Zealand Edition Bookkeeping For Dummies®

Table of Contents

Introduction

About This Book

How to Use This Book

Foolish Assumptions

How This Book is Organised

Part I: First Steps

Part II: Forming a Plan

Part III: Recording Day-to-Day Transactions

Part IV: Pulling It All Together

Part V: Building Reports

Part VI: The Part of Tens

Icons Used in This Book

Part I: First Steps

Chapter 1: Introducing the Bookkeeping Game

Understanding the Bookkeeping Life Cycle

Figuring How Often to Do the Deed

Working with a shoebox

Doing the books as you go

Staying on the Right Side of the Law

Registering as a business

Getting to grips with GST

Managing payroll

Developing an Attitude

Convince yourself this stuff matters

Quit counting sheep

Do your job well

Getting Skilled Up

Chapter 2: Creating a Framework

Putting Everything in Its Place

Classifying Accounts

Building Your Profit Loss Accounts

Analysing income streams

Separating cost of sales accounts

Cataloguing expenses

Seeing Where the Money’s Made

Itemising Balance Sheet Accounts

Adding up the assets (ah, joy of joys)

Listing liabilities (oh, woe is me)

Accounting for equity

Building a Final Chart of Accounts

Chapter 3: Going for the Big Equation

Matchmaking with Debits and Credits

Studying a little give and take

Putting Theory into Practice

Moving funds in bank accounts

Taking a peek at sales

Checking out expenses

Viewing stock movements

Throwing GST into the mix

Playing the Double-Entry Game with Accounting Software

Stealing a look behind the scenes

Drilling down to the debits and credits

Recording general journals

Choosing between Cash and Accrual

Keeping things simple with cash

Getting more info with accrual

Enjoying a half-half measure

Using one method for your books, and another for income tax

Part II: Forming a Plan

Chapter 4: Playing a Bookkeeper’s Rhythm

Reporting for GST

Scraping by in Oz

Muddling through in Middle Earth

Managing cashflow, wherever you are

Staying on Top of Payroll

Meeting payroll deadlines (Australia)

Meeting payroll deadlines (New Zealand)

Generating Reports

Devising a Record-keeping System

Filing that needle in the haystack

Deciding what to keep and how long for

Developing a Bookkeeping Calendar

With golden soil and wealth for toil

Peace, not war, shall be our boast

Chapter 5: Doing Business with Accounting Software

What’s so Great about Accounting Software Anyway?

Doing books by hand — is it worth it?

Using spreadsheets instead

Choosing the One that’s Right for You

Playing with that test bunny

Focusing on the pain points

Getting Down to Specifics

Checking out the MYOB family

Zooming in on QuickBooks

Going online with Xero

Setting Up Accounting Software

Preparing for battle

Firing live on D-Day

Mopping up when the dust has settled

Protecting Your Accounting Data

Devising a backup strategy

Planning for disaster

Keeping private stuff under wraps

Chapter 6: Safeguarding Against Fraud

Getting Wise to What Goes On

Pulling the wool off your own eyes

Figuring out how the deed is done

Controlling Money In, Money Out

Choosing signatories for bank accounts

Receiving payments

Making payments

Managing cash in a retail setting

Dealing with petty cash

Putting Systems into Place

Separating powers between bookkeepers and the cash

Authorising bill payments

Keeping an eye on stock

Setting ground rules in the workplace

Clocking on, clocking off

Protecting Against Online Fraud

Choosing online services

Protecting your passwords

Safeguarding from the inside out

Detecting Fraud

Monitoring margins with a beady eye

Staying alert to suspicious behaviour

Checking audit trails

Employing external auditors

Chapter 7: Understanding GST

Coughing Up the Difference

Signing Up (Is There a Choice?)

Submitting to the inevitable

Choosing not to register

Picking a reporting method to suit

Reporting for duty

Calculating GST

Going decimal the Aussie way

Keeping quirky east of the Tasman

Figuring What’s Taxed and What’s Not

Move it, groove it, tax it

Transactions with no GST (NZ only)

Setting Up Tax Codes in Accounting Software

Creating a list of tax codes (Australia)

Creating a list of tax codes (NZ)

Staying Out of Trouble

Avoiding traps for the unwary

Dancing the Paperwork Polka

Brewing up a Tax Invoice

Checking supplier bills

Part III: Recording Day-to-Day Transactions

Chapter 8: Recording Expenses and Payments

Creating Order Out of Chaos

Recording Payments — Three Methods

Writing a journal by hand

Getting smart with a spreadsheet

Staying sweet with accounting software

Nitpicking over Petty Cash

Storing cash under lock and key

Robbing Peter to pay Paul

Choosing Allocation Accounts

Recording Purchases, Not Just Payments

Deciding whether to use accrual accounting

Laying down the deal in plain English

Laying down the deal in debits and credits

Developing a rhythm to fit

Keeping Tabs on Who You Owe

Chapter 9: Recording Receipts and Sales

Tailoring for the Perfect Fit

Writing up sales by hand

Working up a sweat with spreadsheets

Recording sales using accounting software

Recording customer payments using accounting software

Bookkeeping for Other Kinds of Income

Recording miscellaneous receipts

Dazzling everyone with your brilliance

Keeping Track of Who Owes You What

Dealing with Tricky Situations

Dishing out discounts

Giving credits or refunds

Writing off bad debts

Chapter 10: Paying Employees

Staying Squeaky Clean

Hiring a New Employee

Getting the paperwork in order

Covering against mishaps

Subscribing to super (Australia only)

Submitting to KiwiSaver (New Zealand only)

Doling Out the Cash on Pay Day

Paying folks their dues

Taxing pay (no mercy shown)

Dealing with deductions

Calculating superannuation (Australia only)

Taking Leave in the Land of Oz

Calculating leave on a percentage basis

Calculating hours per pay period

Taking Leave in New Zealand

Calculating annual leave for full-timers and part-timers

Calculating other kinds of leave

Maintaining Proper Records

Keeping records of what’s due

Keeping tabs on employee details

Writing up pay correctly

Issuing legit pay slips

Chapter 11: Reconciling Accounts

Getting Started

Deciding what bank accounts to reconcile

Calculating your true bank balance

Recording your opening bank balance using accounting software

Doing Your First Reconciliation

Reconciling accounts by hand

Reconciling accounts with spreadsheets

Reconciling accounts using software

Keeping Proof that You’ve Done the Deed

Troubleshooting Tricks

Balancing Other Kinds of Accounts

Part IV: Pulling It All Together

Chapter 12: Reporting for Payroll

Accounting for Payroll Liabilities

Checking payroll liability reports

Troubleshooting payroll liabilities

Coughing up the dough

Calculating Other Payroll Expenses

Splitting hairs with fringe benefits

Hitting the payroll tax threshold

Reporting for workers comp (Australia)

Covering for accidents (New Zealand)

Getting Pedantic at Year’s End

Printing Payment Summaries (Oz Only)

Meeting Minimum Pay and Conditions

Applying the law (Australia)

Applying the law (New Zealand)

Chapter 13: Managing Inventory and Other Assets

Buying In, Stocking Up and Selling Out

Buying inventory to fill the shelves

Selling inventory to make a buck

Measuring the profits

Calculating the value of inventory

Organising Stocktakes

Balancing Your Inventory Account

Accounting for Your Assets

Figuring out if something is an asset or an expense

Recording new asset purchases

Recording the sale of assets

Depreciating Assets, One by One

Calculating depreciation

Checking your schedule

Chapter 14: Mastering Tricky Situations

Recording Journal Entries

Plunging Into Debt

Going into the red

Recording loan interest and fees

Working with Hire Purchase, Leases and Chattel Mortgages

Taking on a new hire purchase debt

Recording hire purchase payments

Living it up with a new lease of life

Signing up with a chattel mortgage

Going for gold with GST adjustments

Tweaking the Bottom Line

Reallocating prepaid expenses

Accruing future expenses

Figuring out leave provisions

Separating private expenses from business ones

Bringing Income into Line

Shifting income received in advance

Grossing up dividends

Chapter 15: Checking Your Work

Starting With the Bank Accounts

Step one: Checking that everything reconciles

Step two: Hunting for stale transactions

Step three: Drilling down on dates

Spring Cleaning Your Debts

Step four: Getting debtors spick and span

Step five: Sweeping through the creditors

Putting GST under the Griller

Step six: Hunting for coding mistakes

Step seven: Balancing GST liability accounts

Understanding Control Accounts

Step eight: Balancing debtors and creditors

Step nine: Giving inventory the once over

Step ten: Priming the payroll

Doing a Mini-Audit

Step eleven: Scanning transaction reports

Step twelve: Analysing summary results

Part V: Building Reports

Chapter 16: Creating Financial Reports

Reviewing the Accounting Cycle

Putting Your Accounts on Trial

Taking debits and credits to their natural extreme

Fighting against trial and error

Finding Gold at the Rainbow’s End

Preparing the groundwork

Yeehaa! Creating a Profit & Loss report

Yippee! Building a Balance Sheet first time around

Building a Balance Sheet the next time

Turning Over a New Leaf

Chapter 17: Understanding Financial Reports

Telling the Story with Profit & Loss

Putting income under the microscope

Weighing up gross profit

Watching expenses, dollar for dollar

Painting a Picture with the Balance Sheet

Sketching assets, black as ink

Drawing liabilities, red as blood

Sculpting equity, cast in gold

Understanding the Relationship between Profit and Cash

Why there’s profit but no cash

Why there’s cash but no profit

Reporting where cash came from, and where it went

Putting Results Under the Microscope

Comparing this year against last year

Calculating ratios

Chapter 18: Starting a New Financial Year

Finalising the Old Year

Out with the old year . . . in with the new

Generating end-of-year reports

Protecting against accidents

Sending Data to Your Accountant

Matching the Accountant’s Figures Against Your Own

Recording year-end journals

Dealing with adjustments that only make things worse

Getting creative when the accountant gives you nothing

Bridging the Communication Gap

Starting a New Year

Understanding what happens when you start a new year

Archiving data — just one more time

Part VI: The Part of Tens

Chapter 19: Ten Tips for Not-for-Profit Organisations

Know and Love Your Cost Centres

Become the Budget Queen

Get the Terminology Right

Report to the Board

Get Help with Payroll

Do Killer Grant Reporting

Be Accountable at All Times

Make Sure You Can Survive an Audit

Track Membership Dues with Care

Know When to use Trust Accounts

Chapter 20: Ten Tricks for Collecting Money

Draw Up a Credit Policy

Consider a Romalpa Clause

Don’t Waste a Moment

Calculate the Cost of Debts

Get on the Blower

Don’t Give Too Many Options

Keep a Dossier

Track ’em Down

Stick to the Law

Get Drastic

Chapter 21: Ten Words of Advice for Contract Bookkeepers

Figure Out Whether You Have to Register

Don’t Kid Yourself

Find Out Whether You Meet the Grade

Get New Skills if You Have To

Piggy-Back on Someone Else

Cover Yourself with Insurance

Join a Professional Association

Know Your Code of Conduct

Anticipate Ethical Dilemmas

Keep Your Lips Sealed

Chapter 21: Glossary

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