 Here's some tips 'n tricks to make sure your Xero file is accurate, protected and delivering the most value for you! 1. Set up two step authentication for your login. It's easy to do and gives your data an added layer of protection. Click here for instructions. 2. Enter the opening balance of bank account/s when you start the file. There's little point having a bank feed driving your file if it's not accurate and reliable. Click here to ensure you're set up properly. 3. Check your actual bank balance against your Xero bank balance at least quarterly via the Reconciliation report and publish them for future reference. Click here for instructions. 4. Enter Contacts correctly the first time round. Xero allows you to create contacts on the fly which can be really useful, but if you take the time to set up a new supplier or client in the Contacts tab with all the details, you'll thank yourself in the long run. Click here for best practice set up or if you've managed to cook up a crazy multi-contact stew click here to easily merge them. 5. Set up superannuation guarantee (SG) as statutory rate in your employee pay template, that way Xero takes care of any rate changes automagically and you can rest assured you're compliant. Click here for help with setting up pay templates. 6. Lock down periods regularly. At the end of any reporting period ensure that it gets locked to stop anyone making changes down the track. The advisor can unlock upon request - but in the meantime it stops transactions being altered after they've been reported on. Click here to learn more.   Gabrielle Osborne (BAcc) is a small business specialist who loves to help business owners focus on what they do best. An innovation enthusiast and determined problem-solver, Gabrielle is also fun to work with.
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 Whether you're building an empire, hustling from home or starting a side gig, you need to understand your financials. It will give you confidence, help you make informed business decisions & at the end of the day, let you know if all the effort is paying off. This is part of a series of byte-sized info for busy people to help you understand some of the terminology in business. So let me break it down for you......  The Balance Sheet (also known as a Statement of Position) lists the assets, liabilities and equity of the business. Unlike a Profit and Loss that looks at performance over time (click here to learn what's on your Profit and Loss), a Balance Sheet looks at the health of a business at a given point in time, for example at the end of a quarter. It is called a Balance Sheet because the elements on a Balance Sheet need to ..well, balance! Historically, the assets were listed on the left and the liabilities and equity on the right and the two totals had to match. Nowadays, you're more likely to see them listed vertically Assets > Liabilities> Equity. But the basic balancing act remains - Assets = Liabilities + Equity. Ok, let's break down those terms! Assets belong to the business and include things like bank accounts, office equipment, motor vehicles, accounts receivables (sales where the money hasn't actually paid), buildings, goodwill and inventory. Liabilities include debts, loans, credit cards, accounts payable, and payroll liabilities (paygw accrued, superannuation payable etc). Equity, in its simplest form, represents the difference. Basically were you to use all your assets to clear all your debts and obligations, what's left over is the equity in the business. As the Balance Sheet represents the overall health of your business, you can use ratios to look at things like debt to equity, solvency and turn-over ratios on inventory as markers for long-term success. Hey, not so hard after all? A = L+E! Let me know if you have something that I can break down for you!
 Whether you're building an empire, hustling from home or starting a side gig, you need to understand your financials. It will give you confidence, help you make informed business decisions & at the end of the day, let you know if all the effort is paying off. Here is the first in a series of byte-sized info for busy people to help you understand some of the terminology in business. So let me break it down for you......  Okay, we all know that weird moment when your accountant presents you with your profit for the year and it's nothing like your bank balance! Ever wondered why that is? A Profit & Loss statement reports your income and expenses over a period of time and can help you figure out things like whether you're charging enough, selling enough or spending too much. It reports all income (in-coming funds) less all your expenses (exiting funds). Or as my friend Ange likes to say, it shows 'What your Earn' less 'What you Burn'. If you record your income less all your expenses, at the very bottom you have a number representing your profit or (loss) known as your net income or net profit - often referred to as the 'bottom line'. Not a reference to someone wearing undies a size too small! It is literally the last number on the bottom line of the Profit and Loss. If you are registered for GST, your income and expenses show net (without) GST because that 10% ain't yours in the first place. It belongs to the ATO. PRO TIP> Every time you get paid, pop that 10% into a separate bank account. It takes discipline but you'll thank yourself when it's BAS time. That's pretty straightforward right? But in truth it's a little more complex. Of course it is. Try and stay with me.... Here's a sample of things that you wont find on your Profit & Loss because they sit on your Balance Sheet/ Statement of Financial Position as assets, liabilities or equity [read here]. The money used to purchase stuff for your business (office equipment, computers, machinery, motor vehicles etc) do not show up as an expense as they are considered an asset of the business, that is, something that will help you produce future income. You may not have received the actual payment (money in your bank) for your sales invoices, so that sits on your accounts receivable/debtors. And flip that for any bills you may have in your books on credit - these sit in your accounts payable/creditors. Loans and debts (for example a credit card) are recorded as liabilities and represent future obligations to pay. If you make a repayment on your credit card, it's not recorded as an expense it's a reduction of that liability. Also any drawings, director loans or trust distributions don't show on your profit and loss. That's why it's never the same as your bank balance. Your P&L does not record all movements of money in and out of your bank account. That's your P&L basics done. Next time we'll look at the Balance Sheet (also known as Statement of Position) - click here to read more.
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