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Accounting, Taxation

As a small business owner, your list of tasks can feel endless. And one job that often falls to the bottom of the list is tax. We spoke to Avalara, a tax automation software company, to find out how small businesses can manage sales and use tax.

Understand your tax obligations

If you’re selling taxable goods or services in a state where you have a presence, you almost always have tax obligations. This means you are legally required to collect, file and remit sales and use tax.

We worked with the team at Avalara on this guide. It will help you understand what it means to collect sales and use tax, explains the risks of not doing it, and includes a simple plan to achieve sales tax compliance.

1. Understand the risks of not paying sales tax

When you begin collecting sales tax, you’re dealing with the state and local government. As a small business owner, you’re acting as an agent of the state. You’re obliged to transfer tax revenue from your buyers to the state and local tax authorities. Failure to do so opens up the door for audits, penalties and interest payments. Here are the risks:

Late payment penalties
If you miss your filing or payment deadline you may end up owing money to local tax authorities. This may apply even if you have collected no sales tax during the filing period. Remember to check the rules in your state as these rules vary between states.

Once you’ve registered with a state to collect sales and use tax, you’ll be given a filing frequency – usually monthly, quarterly, or annually. You must file your tax return(s) on the correct due date(s).

Set up alerts on your computer or phone to remind yourself of due dates. Failing to file a return draws the attention of state tax authorities. If you’re trying to avoid being audited then don’t forget to file.


Outstanding sales tax liability isn’t a free loan. State and local tax authorities may charge interest on outstanding tax revenue. Depending on how much sales and use tax you owe, this can add up fast. And if you haven’t collected any sales tax you may end up with two bills. Firstly, you’re responsible for paying your buyers’ tax (out of your pocket). Secondly, you’re responsible for any fines and interest on the late payments.

Collection fees

If a state auditor confirms you have outstanding sales tax liability and they’ve told you about it, they may call in a collection agency. Collection agencies aren’t cheap and the costs will be charged to you. It also may affect your personal credit rating.

Criminal charges

Evading your responsibility to collect sales tax may result in civil penalties such as fines, penalties and interest charges. However, collecting state taxes and not remitting (paying) them to local tax jurisdictions may result in jail time.

2. Find out when you need to start collecting tax

A common question from small business owners is, “When do I need to start collecting sales tax?” The answer is complicated.

By law, you need to begin collecting sales tax on your first taxable sale. State and local tax authorities don’t offer a grace period when this tax can be ignored. You need to think about the risk of not collecting sales tax versus the overall cost of filing and paying.

Deciding when to get started with sales and use tax is your responsibility. It makes sense to ask a certified tax professional for expert advice on when and how to get started collecting sales and use tax.

3. Taxes are complicated – make sure you use genuine experts

Sales and use tax management can be complicated. Many people think they are so-called ‘experts’ because they are also wrestling with compliance. Your peers and colleagues may be very knowledgeable, but how can you be sure when you’ve found an expert?

You need to strike a balance between online research and professional advice. Use government websites to start with. And always consult an accounting professional. This is especially important for questions that go beyond basic tax compliance.

When you’re ready to consult a tax professional, you can use this tool to find a certified advisor.

4. Learn about nexus

Once you’ve decided to start collecting sales tax, you need to know which states require you to collect it. This depends on an important legal concept called nexus (or “physical presence”).

Nexus is broadly defined as “a physical connection to a state or local taxing jurisdiction.” But nexus is not just about having a “physical presence”. The actual meaning is more complicated.

Nexus is commonly defined by things like your office location, your warehouse location or where your employees are. But there are other ways to define nexus. These are important because your nexus can affect your tax jurisdiction – and therefore your tax obligations.

Five things can determine nexus:

Your home state
Your business will always have nexus in its home state. Your home state is more than just the state in which the business is located. In fact, home state is defined as “the state where your company exists, either in physical form or by virtual existence based on business registration, DBA name registration, or banking activity.”

This makes the home state the most common “nexus trigger” and applicable to nearly every business. So use meeting your home state tax obligations as an opportunity to develop a sales and use tax management process. Develop a plan, get the right tools and become efficient with your tax filing. That way, when you’re ready to begin filing in other states, the task will be easier. You’ll have a template to follow.

States you visit
If you travel to other states for business – for example conferences, meetings, sales calls – this can trigger nexus. Manage your travel carefully so you don’t trigger nexus without realising. If you do and fail to collect sales tax, it can cause problems.

Your fulfillment services
If you have a fulfillment service with stock in warehouses in several states you may trigger nexus in those states. This is common for Amazon sellers using the Fulfillment by Amazon (FBA) program. If that includes you, carefully monitor where your stock is at all times.

Always check the warehouses where your goods are being stored. If they are moved quickly (as they often are) it can change your nexus profile.

Your remote employees
Services like Skype, Slack and Google Hangouts make it easy for you to work with remote staff. They can also trigger nexus across the country. If possible, hire remote employees within your home state. If remote employees outside your state trigger nexus, it can complicate your tax collection requirements.

How you use affiliate marketing
Many small businesses harness the marketing power of the internet using affiliate marketing. It usually works best for businesses with an internet presence like a blog or online store. Adverts for your business are placed on your affiliates’ websites. This drives relevant traffic (and hopefully sales) to your website. The affiliate marketer gets a small cut of the revenue in exchange for their advertising efforts.

Amazon Associates and Google AdSense are the most common affiliate marketing programs. Click-through nexus applies if your business works with an affiliate marketer in another state. In this case, your relationship with the affiliate marketer can trigger nexus.

5. Follow these steps to ensure tax compliance

Feeling overwhelmed? Don’t panic. Here are the basic steps to manage sales and use tax properly:


Determine if what you sell is a sales tax object. A sales tax object may be a good, a service, a digital object or a combination of each. Understanding the taxability of objects is critical. Under-collection can result in audit assessments and over-collection can result in potential lawsuits (or annoyed customers). It’s important to remember that every state may view the same object differently.


The next step toward establishing sales and use tax compliance involves registering your business in the states in which you have nexus. Depending on the size of your business, this may involve a brief review of your operations or a professional nexus study.

The type of registration can vary depending on the facts and circumstances of your business. Completing registration accurately is important for compliance. It lasts forever, so take your time, do the necessary research and get it right.

Registration gets your business an official sales tax licence. All states require a business to register at least one to two weeks before selling taxable goods in their state.

Collection and filing

Once you’ve registered for a business licence in the states in which you have nexus, the next step is to begin collecting sales tax. Every major online selling platform offers this functionality built-in. You can set it up from within your software.

Once you’ve started collecting sales tax, you’ll need to file a return based on your filing frequency (assigned during registration). Filing a tax return involves breaking down the tax you have collected by jurisdiction – state, county, city. Then you submit this information to your state and local taxing authorities.


After you’ve filed your return, you’re responsible for remitting (paying) the sales tax dollars collected. Be sure to review state filing procedures as some states require filing and remittance to happen at the same time.

Make sure you know what your payment options are ahead of time. Most states offer modern fund transfer via EFT or wire transfer. If you’re planning to write a cheque, use a credit card or pay with cash, be sure to check with your tax authority first.

6.Managing sales and use tax is complicated

Sales and use tax compliance is a very real concern for any small business serious about growth and long-term success. Failure to collect, file, and remit this tax in states where you have nexus is a risky path. Late payment penalties, collection fees and interest payments can put your business at risk. Remember, knowledge is power. Take the time to learn how to achieve and sustain sales and use tax compliance. It’s time well spent.






Every business needs a bookkeeper. A good one will take care of the day-to-day accounting work and keep your business on track financially. But how do you hire the right bookkeeper?


Helping you with the numbers

As soon as you start a business, you have to deal with numbers. Every business, no matter how small, must keep a record of its every transaction. That includes sales, expenses, salary payments – in fact every movement of money into and out of your business.

Although it’s possible to do this yourself, most entrepreneurs aren’t trained in bookkeeping. So it’s common for businesses to outsource this everyday work.

In this guide we’ll explain why hiring a bookkeeper is a great idea, or even an essential part of doing business. Then we’ll look at how you can hire the right bookkeeper for your business.

Three reasons why you need a bookkeeper

If you’re just starting out in business, you might think you don’t need someone to look after the books. Perhaps you feel that it’s enough to let your accountant sort out the numbers once a quarter or once a year. But there are good reasons for hiring a bookkeeper. Here are three of them:

They save you time
Unless you already know a lot about bookkeeping, it’s unwise to take on this work yourself. Processing receipts, expenses and payments is only part of the work. They know how to assign expenses to particular clients. They’ll take all the numbers, enter them into your accounting software, and make sense of them. A good bookkeeper knows how transactions should be treated to provide useful business reports. It’s a skilled job, and your bookkeeper will do it much more efficiently than you can.

They understand your business
Because they deal with the day-to-day accounts, bookkeepers have a deep insight into your company’s finances. By sharing this insight with you, they can help you work out where your business should be going. They can flag any issues in time for you to do something about them. A good bookkeeper watches over your finances and helps you steer clear of trouble.

They help manage your cash flow
Accountants provide a valuable service, particularly when it comes to strategic advice, annual returns, and tax issues. But they don’t usually see your accounts every day. A good bookkeeper will keep a close eye on your accounts on a regular basis. This will help keep your cashflow under control, which is vital for business growth.

Understand what you need

Hiring a bookkeeper is like hiring any other professional. First you need to understand your own requirements. Only then can you identify people who will suit the role. Here are some questions to think about:

What type of business do you run?

For example, manufacturing businesses have different bookkeeping requirements to service or retail companies.

How many transactions do you make on a daily, weekly or monthly basis?

This will help determine how much bookkeeping time will be required.

Which accounting software do you use?

It helps if you’re using online accounting software. Then your bookkeeper can share data securely with you at any time.

Do you require credit control, payroll services or debt collection services to help you get paid faster?

Some bookkeeping companies can handle chasing up the money customers owe you, at a cost.

What are your key dates?

Your key dates will include payroll days, tax return deadlines and scheduled meetings with your accountant. You’ll want your accounts to be accurate and up to date before each of these dates. A key date also revolves around business performance reports. Ask the bookkeeper if they review reports every month to see how the business is performing. One example is a timely and accurate Profit and Loss report.





You need billing to be fast and accurate. Because the sooner invoices go out the door, the sooner you get paid. These 9 suggestions could make your billing better.

1. Set a billing schedule
It’s tempting to give preference to paid work and put invoicing off. But no work is paid without invoicing, so make it a priority. Pick a day and time of the week to get it done, then lock it into your schedule. If you’re just too busy, great, hire a bookkeeper to help.

2. Invoice more often, get paid more often
Invoicing can be such a chore that a lot of businesses only do it once a month. And that doesn’t make sense because invoices are paid late. When you’re slow sending them, and your customers are slow paying them – it’s a bad combination.

Consider billing weekly. Or, if you do lots of odd jobs, send invoices as soon as the work is done. It prevents a backlog from forming, and it gets your customers on the clock sooner. Money should start flowing into your business more consistently, rather than in fits and starts.

3. Connect quotes and invoices
It’s a good idea to get quotes signed off before starting work. Use descriptions from that agreement in your invoice so customers can see they’re getting what they paid for. It should help avoid misunderstandings or invoice disputes.

4. Use invoice templates to their fullest potential
Many businesses use invoice templates from spreadsheet software. They can save a lot of time if you:

save templates (with pre-filled information) for specific types of jobs and customers.

build in formulae that total charges and add taxes for you.

Make sure you’re getting the most out of your templates. As you grow, you may eventually move onto a dedicated invoice maker.

5. What could an invoice maker do for you?
Specialist software can speed up the invoicing process by:

learning the price of your products and services

calculating taxes and automatically preparing paperwork for filing

doing daily bank reconciliation to tell you which invoices have (and haven’t) been paid

working from your phone, so you can send invoices from anywhere

You can learn more in our our guide on billing software.

6. Track time and materials better
Figuring out the time or money you’ve spent on a job can be slow work. If you need to open a diary, refer to old emails, and sift through dozens of receipts to piece everything together, then it’s probably taking too long. You really need one source of truth for time and one for expenses.

Not everyone is good at staying this organised, but there are apps to help:

Time-keeping apps allow you to clock in and out of jobs from your phone.

Expense apps allow you to photograph a receipt and attach it to a specific job so the information is there when you go to make an invoice.

7. Should you accept online payments?
You can get your money up to 50% sooner just by offering a convenient payment method. There are a lot out there, including debit and credit card, automated clearing houses (ACH) like PayPal, or bank transfer. It costs nothing to set any of them up, although most providers charge a transaction fee.

If your customers already pay on time, then you’re probably ok. But if they’re slow, an easy payment option could speed them up. Find out how online payment services get you paid faster.

8. Train your customers to pay on time
When you first bill a new customer, call them to check the invoice has everything they need. It’s a nice courtesy but you’re also taking away excuses for late payment. If they miss the due date, call the very next day. You don’t have to be aggressive. You’re just making sure nothing’s wrong, and signalling that you watch this sort of thing closely. Keep this up over the first few invoices to set expectations.

9. Chase invoices like you really want them
The most important part of the invoicing process happens after you’ve sent the bill. Because no matter how accurate, professional or well-formatted your invoice is – it probably won’t get paid on time. You have to follow up. Remind your customer when the due date is up and, if they still don’t pay, get on the phone. It’s not fun but it’s hugely important.

Learn more about how to handle unpaid invoices.

Build the perfect invoicing system
A smart invoicing system will help you get bills out faster, and money in sooner. That’s good for business. Use these 9 questions to review your invoicing process regularly, and keep from falling behind.


Find out how to make an invoice that will be accepted by your most fussy customers. This guide takes you through the basics of raising an invoice and putting all the right information on it.

The etiquette of raising an invoice

Make sure your customer is expecting your bill. If it comes out of nowhere, they may be slow to approve it, or even annoyed. Explain your process before you supply anything, so they know when to expect your bill. If you don’t have an agreement in place, at least tell them when an invoice is about to be sent.

What information goes on an invoice

1.Information about you
Your name, address and contact details. Freelancers can use a personal name, otherwise use your business name.

2.Information about the customer

Add the customer’s name and contact details. If it’s an organisation, confirm their legal name. It could be different from the brand name you’re familiar with.

3.Details about what was sold
List the products you supplied, their prices, and the quantities of each. Or list services, with professional fees against each.

4.The cost

Total all your charges, making sure to apply any discounts you’ve offered. Add sales tax at the end.

5.The customer reference
If your customer has given you a reference or purchase order number, include it. This will increase your chance of being paid promptly.

6.Instruction on when and how to pay
State when the invoice is due, and be clear if there are late fees (or on-time discounts). Tell them which types of payment you’ll accept and give the information they need to make those payments, such as a bank account number or a link to online payment

How to create an invoice number

An invoice number can be anything – and can include letters – as long as none of your invoices have the same number. You can simply number them sequentially – INV-001, INV-002, INV-003, and so on.

If you want your invoice number to be more informative, you could:

give each customer a separate code (Vandelay Industries becomes VAN)

create a job number for each project (001 for cleaning their sales offices and 002 for cleaning the factory offices, for example)

include the invoice date (using the yyyy-mm-dd format will make it easier to group jobs this way)

So for cleaning the factory offices on January 21, 2018, you’d make an invoice with the number VAN002 – 20180121.

Invoice details – how much is too much?

Always provide a description of the goods or services supplied, so the customer knows what they’re paying for. But don’t add so much detail that it slows down your invoicing process. Here are some guidelines to help you make an invoice that’s straightforward:

Use language from your original quote so the customer can see you’re delivering on your promise.

Be as concise as possible. You can keep a more detailed record of the work in a private diary, but don’t put it into the invoice unless you’re asked for it.

If a customer requests a lot of detail, add it as an attachment. Keep the invoice itself to one page if you can.

Now you know how to make an invoice

Open your invoice template

Create an invoice number and add the date

Fill out information about you, the customer, and the goods or services

Total the costs and double check your maths

Send the invoice

File a copy for your tax records

Learning how to make an invoice is simple, but it’s just a document at this stage. If you want to get paid, there’s more work to do. Get more in our guide to an awesome invoicing process.







Sending clear and complete invoices ensures you look professional, and helps you get paid on time.
Here are the dos and don’ts of invoice formatting.

Basic invoice format – what goes where
Your customer has just opened your invoice. Here are the 7 things they should see – going from the top of the page to the bottom:

1.Your details

Your name and contact details are required.

2.Their details

Identify the person or organisation that you’re billing, and include their physical or email address.

3.Invoice number and date

Make this big and bold. If you call about an invoice and quote the number, it should be easy for your customer to pick it from a pile.

4.Description of goods or services

List the products or services supplied. Put costs against each item so customers can see how the bill breaks down.

5.What the customer owes

Most people want to see the cost before anything else so bold it. Make sure you’ve applied any discounts and added sales tax.

6.Customer reference

If your customer has given you a reference or purchase order number, include it. This will increase your chance of being paid promptly.

7.How to pay

Tell them when the money is due and how they can get it to you. Include links for credit card payment, for example, or account details for bank transfers.

Use our free invoice template
Templates will help you get your invoice format right, because all the fields are preset. You just have to open it up and fill it out.

Download our free invoice template.

You can give yourself a head start by setting up templates for specific types of jobs, or certain customers – with a lot of the details already filled out.

Bonus tips to save hassles

Include a foolproof set of instructions telling customers how to pay.

Put the invoice number in the file name and email subject line so it’s easier to search.

Convert your invoice to a PDF (or send an online invoice) so it’s harder for frauds to interfere with it.

Keep your invoices simple (and short)
Limit your invoice to a single page, if you can. It’ll be easier for your customer’s office staff to process.

There will be times – hopefully a lot of times – when you’re invoicing a really big sale. If you can’t fit it all on one page, provide a summary on page 1 and add details to subsequent pages.

After you’ve got invoice formats nailed
After you’ve been in business for a while, and you’ve got your invoice formats straightened out, you’ll want to speed things up. Smart invoice templates can do things like remember your prices, total costs and add taxes for you. Find out how software can automate these tasks and others.

Knowing how to format an invoice is just the start
A clear, well laid-out invoice is your first step to getting paid, but there’s much more to do. Check out our other invoicing guides to help you get what you’re owed.





What is direct debit?

When you set up a direct debit with a customer, you can collect payments straight from their bank. Of course you have to notify them ahead of time what you’re taking and when, but the customer doesn’t have to do anything to make the payment happen.

Benefits of direct debit for small business

While it takes 30 days or more for a customer to pay an invoice, direct debit is almost instant. Payment is triggered as soon as you send the bill.

It’s convenient, too. Customers don’t have to approve payments or remember to make payments, which simplifies their life. And you don’t have to spend as much time tracking invoices or chasing payments. Businesses that use direct debit to bill customers say they get back a day a week in admin time (this is an average, and would obviously change depending on size).

Direct debit is ideal for:

subscriptions for things like gym memberships or software

regular invoices such as monthly retainers (for fixed or variable amounts)

accepting instalments to help customers spread out their costs

collecting rent from tenants

How does direct debit work?

Your customer fills out a direct debit form (also known as a mandate) authorising you to take payments from their bank. When a payment is coming up, you send the customer a notice saying how much will be taken, and when. The customer doesn’t need to take any other action. When the due date comes, the payment is made automatically.

How long does a direct debit take?

Customer payments can take up to five working days to clear. The transfer isn’t quite as fast as other online payment methods because you’re pulling money from their account. That’s a slower process than if they push the money to yours.

Direct debit collection options

You can take one of two approaches to direct debit.

Set it up directly through your bank
This can be easy or hard depending on where your customers reside. It’s a lengthy negotiation in some countries.

Use a direct debit provider
The levels of service and charges can vary a lot so shop around.

Easy direct debit for small business

Direct debit was first used by Unilever in the 1960s, but it was complex and expensive. And that’s the way it stayed for a long time. Online technologies have recently streamlined the process, making it affordable for smaller businesses.

As a result, you can now set up for free, and direct debit a customer for between 20 cents and $2 per transaction.

How to set up direct debit

If you’re a small business, you’re probably going to start with an off-the-shelf provider. Here’s how it works.

Choose your direct debit provider

Set up your account through their website (or through your online accounting software).

Add customers and invite them to pay through direct debit
They’ll be emailed a direct debit form. Once they fill it out, you can take payments from their bank.

Set up your payments
You can use it to collect recurring or one-off bills.

Your customer is automatically notified before a payment is collected 
The notice period is regulated so make sure your provider complies.

Payment clears in your account – minus the provider’s fee 
The fee will depend on the size of the bill but shouldn’t go higher than about $2.

Manage all your payments online

View and manage all of your direct debit accounts online. If you’ve chosen a system that talks to your accounting software, you can reconcile payments online too.

What about direct debit indemnity?

Customers have the right to cancel a direct debit transaction and receive a refund. The rules around this vary from market to market so, again, it depends where your customers are based. But it can be hard to avoid giving a refund when one is requested, even if you disagree with it. That’s why direct debit is not recommended for really big transactions

Fortunately, only about 1 in 500 direct debit transactions gets disputed.

Direct debit services for small businesses

While a lot of companies offer online payment services like credit card, debit card and automated clearing house (ACH), there aren’t as many doing direct debit for small business just yet. That is changing, however, and there are still well-trusted options out there.

GoCardless and uCollect are respected operators that integrate with popular online accounting software.





Before you send an invoice

You don’t want anything about your invoice to be a surprise to your customer. Just as you discuss pricing before reaching a deal, you should also chat about billing. Set out payment terms explaining when you’ll invoice (weekly, monthly, or when the job’s done), and how long they’ll have to pay. A customer should know when they’ll need to part with their cash.

How to invoice

Open an invoice template, date it, add an invoice number and put in details about:

you and your customer

the goods and services sold

the costs (including any taxes you’re expected to collect)

Finish with clear instructions on when and how to pay. You can get more in our guide on how to make an invoice.

When to send an invoice

It’s common to send invoices when orders have been filled, or tasks are completed. If you’re working on a big project, you might send interim invoices for the work done to date. And if you’ve sold a subscription, or you’re on a retainer, you’ll send a recurring invoice at regular intervals.

Think about your cash flow when you create a billing schedule. If you send all your invoices on the same day every month – and they get paid around the same time – then your bank balance will be full of ups and downs. If the downs stress you out, consider spreading your invoicing over the month.

Do invoicing weekly rather than monthly. Or, if you do odd jobs, send invoices as soon as the work’s done. And if you’re billing monthly for regular work, consider using software to automatically send your invoices so you don’t have to worry about forgetting.

Three tips for sending your invoice

Unless there’s a really good reason to send your invoice by post, go with email. It will arrive much faster, it can’t really be lost, and email addresses are simpler to get right. Just double-check you’re sending it to the right contact, and take these precautions:

1.Call after you’ve sent your first bill

Check they got your invoice and they understand what it’s for. This simple follow-up will show them you’re serious about invoicing.

2.Send your invoice in an un-editable format

Frauds have intercepted emailed invoices and added their bank account to the payment details. It’ll be harder for them to do that if you send an online invoice, or PDF invoice.

3.Take your billing completely online

You can post your invoice securely online and send your customer a link. These online invoices allow your customer to pay straight away via a credit card, debit card, or an automated clearing house (ACH). Learn more about online invoicing.

How to write an invoice email

The most important part of your invoice email is the subject line. You might be able to speed up the payment process by quoting a purchase order number, for example. Ask your customer’s accounts payable department how they’d like you to set out the email title.   

You don’t need an elaborate message in the body of the email. Stick with something simple, like: 

Here’s [invoice number], from [business name], which is due on [date]. Thanks so much for your business.

There will be a more detailed description of the goods or services on the invoice itself.

Overdue payment reminder email (or call)

Now you know how to send an invoice, but what if it goes past due? More than a third do, which means you’ll need to prompt your customer. Be polite but act quickly if you don’t want bad habits to form.

You can even email them before they’re overdue with a message like:

Please remember that [invoice number] is due tomorrow. You should have everything you need to process it, but let me know if any questions come up.

If they’ve already gone past due, act quickly with a message like:

[Invoice number] was due yesterday but we don’t have any record of payment. Please let me know when we can expect it.

Or you could make a phone call.

It can be awkward for you, but it’s awkward for them too. That’s why it works. You don’t need to say a lot. Tell them what invoice is late and let them do the talking. Don’t speak to fill the silence.

The gentle reminder email you don’t have to send

For many businesses, following up invoices can be soul-crushing work. You can remove yourself from the equation by using an online invoicing system. The software keeps a list of all your invoices and watches your bank deposits for matching payments. When an invoice is still unpaid on its due date, the software will automatically send a pre-written email reminding the customer they owe you. You’ll only need to get involved with cases where reminders have been ignored.

The last word on how to send an invoice

When sending invoices, timing is critical. You can’t get paid until the customer has the bill. Send your invoice and put the ball into their court as soon as you can. And if the money is not forthcoming, check out our guide on how to chase outstanding invoices.





Accountants help keep your finances in order but bookkeepers play an important role too. So what’s the difference between a bookkeeper and an accountant? And how can a bookkeeper help you run your business?

Bookkeepers and accountants are not the same

If you’re a small business owner, you’ll be familiar with juggling several tasks at once. As well as keeping things running, you need to generate income, keep your customers happy and look after financial information. Tracking the financials can be a chore though, and one of the biggest questions you might have is who you get to help with your accounts. Do you need an accountant, a bookkeeper or both? Let’s demystify things.

Accountants and bookkeepers have different jobs and responsibilities. An accountant’s main focus is:

the preparation and lodgment of statutory returns

advising on legal entity structures

giving general business and financial advice.

Accountants are usually members of a statutory association. Qualified and registered accountants might call themselves CPAs (Certified Public Accountants), CAs (Chartered Accountants) or other titles, depending on the country they’re working in.

Bookkeepers can manage lots of different responsibilities within a small business. But the main focus is the organisation, recording and reporting of financial transactions as part of the operational life of a small business. In more recent times, some bookkeepers have extended their range of duties to include:

training clients to use accounting software

implementation of document management and inventory control processes to create efficiencies within the business

implementation of POS (point of sale) systems that capture the daily transactions in a retail environment.

Develop, implement maintain and review internal business processes.

You will often find that a bookkeeper has an area of specialisation and it’s a great idea to ask them more about this when you are looking at hiring them for services.

What do bookkeepers do?

Here are some of the tasks of bookkeeper that will help to keep your business running smoothly:

Keeping track of daily transactions

A bookkeeper can handle the recording of day-to-day bank transactions. If the accounting software you use has daily automatic bank feeds, this is a great tool for your bookkeeper to use. When your bank statement lines are fed into your accounting software, it’s much easier to keep an eye on cashflow and it also saves on data entry time.

Sending out invoices and managing the accounts receivable ledger

Preparing invoices and sending them to clients is usually the bookkeeper’s responsibility. Managing the accounts receivable ledger – and chasing late payment – is also likely to be done by a bookkeeper.

Handling the accounts payable ledger

Up to a certain dollar amount, it’s usually bookkeepers who will make payments on behalf of the business. This includes payment of supplier invoices, expenses and petty cash.

Keeping an eye on cashflow

One of the most important tasks for a bookkeeper is making sure the company doesn’t run out of day-to-day money. They can do this by watching the balance of revenues to expenses. Then they can take action or offer advice if it looks like the company needs more ready cash.

Preparing the books for the accountant

It’s the bookkeeper’s job to ensure that the accounts are valid and up to date when the accountant needs them. This allows the accountant to use their skills and knowledge to make business recommendations, report to the board and complete company tax returns.

In summary, it’s the bookkeeper who does the day-to-day work so that the accountant can concentrate on strategic financial operations. So bookkeepers play an important role – without them, accountants can’t do their jobs.

One of the most important tasks for a bookkeeper is making sure the company doesn’t run out of day-to-day money.

Bookkeepers and accountants working together

A well-run business is likely to make use of both accountants and bookkeepers. The division of labour is important. Here’s how it might work:

Company formation

As noted in our guide about hiring an accountant, you should use an accountant to help you set up your business. Accountants can help you create your business plan and set up a company structure that best suits your business.

Accounting systems

An accountant or bookkeeper can also help you choose the right accounting software and set it up so that it works well for you and your employees – especially your bookkeeper.

Bookkeeping work

After completing the above tasks and keeping a bookkeeper can focus on keeping your company’s accounts up to date on a daily basis.

Accounts reconciliation

The accountant and bookkeeper will get together regularly, perhaps once a month. They might meet in person or they might work remotely, using cloud accounting software with shared access. Either way, the accountant will look at the figures in the accounts and the bookkeeper will explain any numbers and decisions that aren’t clear.


The accountant will report to the business owner and the board members. The accountant will report on the state of the accounts so that the board and owner have a clear picture of the financial health of the business. A bookkeeper can also provide reporting, but in a less formal way on a more regular basis with what is called management accounts. These reports are often used by the business owner as checkpoints to see where the business is going often in a weekly basis.


Armed with up-to-date figures, the accountant will make recommendations to the business owner and the board. The accountant will offer advice about any planned expansion and investment. They will also advise on whether the business can afford to move into new markets and other financial strategies.

Legal compliance

The accountant will use the information prepared by the bookkeeper to write the company reports. These reports will include information about income and expenses, net profit, assets, liabilities and tax. The accountant will also file the company tax return forms and arrange for tax payments to be made.

This is a sensible way of sharing the workload. The accountant does the work that they have been trained to do, while the bookkeeper provides the necessary financial data.

Five ways that a bookkeeper can help your business

If your business is small, you might be the bookkeeper – at least until you can afford to hire someone to do the work for you. Once your business reaches a certain size, it makes sense to have someone do the bookkeeping for you. Here are five ways that a bookkeeper can help

1.Concentrate on your business strategy

Bookkeeping involves tracking the fine detail and recording it in accounts software. Working with these numbers can sometimes make it hard to see the big picture. So it’s often better to have someone else do this work.

2.Reduce your accounting costs

Are you using an accountant to manage your daily transactions and run your monthly payroll? If so, you could save a lot of money by having a bookkeeper do this work instead.

3.Be an extra pair of eyes watching your cashflow

If you want to avoid running out of money suddenly, you need to keep an eye on your cashflow. We’ve discussed this in our guide to managing cashflow. It helps to have someone else checking the numbers here, making sure your cash keeps flowing. A bookkeeper can do that.

4.Get quick access
to vital figures

Having an accountant manage your monthly business reconciliation and reporting is important. But what if you need some financial information part-way through the month? Bookkeepers can give you the information you need quickly, without you having to wait for your accountant to respond.

5.Keep control of your financial data

Few small businesses can afford to hire their own accountant, so most accountants work on a part-time basis for their clients. If they use quality online accounting software to manage your financials, it makes collaboration much easier. Quality software means that your bookkeeper can work on the same set of data as the accountant. They can both work together to give you the best outcome and help your business grow.

Bookkeeping helps your business run smoothly
Bookkeeping is a vital job in any business. This is true whether you do the work yourself or hire someone to do it for you.

Without proper bookkeeping, your accounts will not be accurate. That means your accountant won’t get a clear picture of your company’s finances and you can’t make strategic business decisions.

Just as importantly, your business has a legal obligation to accurately record its accounts and file company reports to the tax office. So it pays to get this right.

Bookkeeping will help you do all of this – and will also provide you with useful insights into the financial health of your business.






By developing a great content marketing plan, you can set the foundation to create content that inspires, engages and drives awareness of your brand.

This plan will help in driving your overall content strategy, setting clear goals and outcomes that you want to see from your content. We’ve put together nine simple ways to get started.

One: Ask yourself what your purpose is

Nailing down your purpose can be a hard thing to do, but it’s important to get this right in order to shape your content plan. Once you have a clear purpose and mission, you should be able to avoid distractions and really focus on your main aim.

Ask yourself, what is your overarching goal with digital content marketing at your company?

Do you want to be seen as the industry expert? Are you trying to bring in potential leads? Do you want to boost your position in search engines? Are you trying to raise awareness of your brand?

Setting a goal and a mission statement is crucial if you want to stay focused.

Two: Know who your content is for

A well-considered content marketing plan will clearly identify who the content is being written for. Knowing who you’re speaking to is vital if you want your hard work to resonate.

Invest time in market research to help you build up a clear picture of your target audience. Identifying the typical customer for your business will be very helpful when you’re writing.

For example, if your target audience is under 30, has expendable income and is technology savvy, then talk to them on their level and use their language. Use what you know about your customers to help them relate to and engage with your brand.

Three: Do a content audit

You’re probably itching to just start writing, but doing a content audit first is an important part of crafting a great content marketing plan.

By mapping out all the content you already have, you’ll be able to see where the gaps are that need to be filled. You might already have a lot of articles on one topic, so you can always consider repurposing it.

By giving content a rewrite, you’ll be able to refresh and update your site to better fit your needs. Plus, you’ll avoid running into the problem of duplicate content, which can harm where you rank in search engines.

Four: Choose your content types and assign a priority level

Once you’ve identified the topics you want to focus on, have a think about the type of content you want to create.

There are countless different content types that might resonate with your audience, including:




Informal interviews

‘how to’ articles

industry news

quizzes and surveys

Q and A sessions

case studies

If your intention is to gain traction, it’s important that what you’re writing about is well researched. Do some competitor analysis for each piece of content to find out what already exists in this area. Identify what’s missing from competitors’ content, and what could have been done better.


“Nailing down your purpose can be a hard thing to do, but it’s important to get this right in order to shape your content plan.”

Five: Create a content calendar

Creating a content calendar will help you to map out the aims of your content marketing plan.

Start your calendar with one or two related themes. Focusing on specific topics relative to your business will help you to build up site authority, both in the eyes of your readers and for search engine algorithms.

A monthly content calendar and an annual one will help you to plan effectively throughout the year. Be mindful of any key events occurring throughout the year. Do you need to consider these within your planning? For example, this could include creating relevant content around the financial year or writing specific content for the build up to public holidays.

Six: Build in keywords so your content can be found

An important thing to consider when you write content is incorporating keywords, as this will help will search engine optimisation (SEO).

Pages that have quality SEO appear higher in Google and other search engines. There are a number of different things that a search engine looks at to decide how high up your content should sit, including keywords.

Take a look at Google Keyword Planner to see keyword volume (in other words, how popular certain search terms are). Look at Google Trends to see what people are searching for and take a look at the kind of content that ranks highly on page one of Google search.

By understanding what people are searching for, you can tailor your content to fit their needs. And by figuring out what’s missing, you can then create a content strategy that fills those gaps.

It is best to incorporate these keywords into your writing as you go – don’t try to add them later. Read our guide on SEO writing for small business to understand more about using keywords.

Seven: Plan to measure, and track obsessively

Once the content is written and out there, you’ll want to know how well it’s working.

Use link shorteners like or to help track your readers. You’ll be able to see where they’re coming from, where they go, which articles are popular and which aren’t.

Google analytics is a more in-depth way to have a look at what’s happening on your website. You can see if people are finding you through search engines, or whether social media is working better for you.

Review your performance and adjust your content strategy as needed. The great thing about digital content marketing is the ability to measure progress and change tack if you need to.

Eight: Choose your method of amplification and distribution

Make it easy to share your content. Add social buttons to your content to allow your readers to share it easily with their networks.

Target top social networks to actively spread the word about your business. Spend 15 minutes each day highlighting your content on social networks, let your work contacts know and invite them to share anything they find interesting.

Creating a social media marketing plan will help you to consider what your objectives are. Find out how social media can work for your business with tips and tricks on the best way to talk to your customers.

If you have budget, then consider paid amplification of your content. Advertising on social media will allow you to direct content specifically to your target audience.

Nine: A few ideas to get started with now

If you’ve never done a content marketing plan for your business, you might think you don’t have much to write about. But any business can start their content journey with a little creative writing. Here are some ideas to get you started:

Interview your customers. Ask them what they look for in a product or service.

Write about what you’ve learned from working in your industry – be an expert.

Collate relevant news articles, with a short introduction and conclusion. Make sure you avoid breaching copyright.

Publish some industry data, perhaps with your own comments. Make sure you acknowledge the data source.

Choose some of your clients to interview for case studies.

Review any books, movies or magazines that are relevant to your business.

Check out a few tools and sites such as WordstreamCopybloggerContent Marketing Institute and the Google Keyword Tool (you will need a Google account). A great content marketing book is ‘Epic Content Marketing’ by Joe Pulizzi.

Avoid making your content all about your business and instead focus on topics that your target audience will find interesting. For example, ‘Harriet’s ice cream shop is the best!’ sounds like a sales pitch, but ‘11 surprising facts about the history of ice cream’ is relevant, engaging and not a hard sell.

Producing content that your readers are genuinely interested in will help you build trust with your audience. By keeping them entertained and engaged, you can start to position your company as an authority on the subject matter.

Great content is the gift that keeps on giving

A quality content marketing plan is the foundation of effective content. And effective content makes for a successful website.

If you can produce a content strategy that ensures you’ll always have a calendar of interesting content in the pipeline, your readers will reward you by coming back for more. And more traffic to your website will lead to higher sales and free word-of-mouth marketing.

By creating a solid foundation, with a plan in place, you’ll never lose focus and be well on track towards becoming a content guru in your own field.






Freelancing is on the rise

Times are changing, and so is the way we work. Many people are figuring out how to freelance and taking on work as contractors or consultants.

An Australian survey found 30 percent of the workforce are freelancers.

The ups and downs of freelancing on the side

It’s a good idea to weigh up the pros and cons of taking freelance work. You’ve probably already considered the benefits like:

Extra income

Being your own boss

Developing new career options

Working on projects that really interest you

Keep in mind there are challenges too, such as:

Meeting deadlines for two jobs

Finding ways to market yourself

Managing client expectations

Filing taxes as a self-employed person

There’s plenty to think about before you get started.

1.Check your primary employer’s policy on freelancing

Most companies understand their employees might take on freelance work. They’ll probably have policies to restrict you from dealing:

1.With a competitor

2/Directly with a client of theirs

They may even prohibit you from working in the same industry. Check your employee contract and, if in doubt, ask your boss. It’s better to be clear.

2.Freelance in your own time

No matter how busy you get, always freelance in your own time. Your primary employer – and your colleagues – should get the same professionalism from you as always. You’ll have to work out how to freelance in your own time.

And remember that perceptions are important so try to avoid taking freelance-related calls at your day job. Make it clear to your clients that they’ll have limited access to you during office hours. They should understand that – it’s part of working with a freelancer.

3.Find low-budget ways to attract business

You’ll need to market yourself if you want a steady stream of freelance income. Fortunately there are plenty of low-budget ways to show what you can offer.

Maintain an online portfolio (you can use a free platform like Weebly)

1.Write a blog to demonstrate your knowledge and thinking.

2.Offer free training or seminars – perhaps at your local startup hub.

3.Volunteer on interesting projects to build up contacts, skills and portfolio pieces.

4.Networking is also important. Besides introducing you to potential clients, it will help you find other freelancers to partner with.

4.Record your time

Be sure to document what you do and when. It’ll help you create accurate invoices.

Even if you’ve agreed a flat fee, time-recordings are helpful. They’ll tell you how long a job actually took – as opposed to what you thought it would take. This will help you estimate future jobs accurately.

Time recording can be done quickly and easily on your mobile phone using apps such as:




5.Deliver what you promise

Avoid over-promising to get a job. Be realistic about what you can deliver and when – then convey that clearly to the client.

Make sure you both understand the scope of the job and agree on the outputs you’re expected to produce. Do your research before agreeing to a budget or timeline. And protect yourself by confirming what you’ve agreed in writing.

If expectations seem vague, make the effort to straighten them out. You don’t want to be caught out making last-minute changes when something’s not right. Or rushing at the end because you weren’t sure when something was due. Question all the assumptions you’ve made.

You’ll also need to manage expectations as you go. Stay in touch with your client and tell them if the job is taking longer than expected.

6.Avoid burnout

When you’re freelancing on the side, life can get hectic. Even if you’re enjoying the buzz of extra income and exciting projects, it’s important to have realistic expectations of yourself. Overworking will eventually lead to exhaustion and a dip in productivity. Learn how to freelance sustainably, without running yourself down.

Avoid burnout by:

1.Recognising when you have too much on and saying ‘no’ to new projects

2.Partnering with other freelancers to share the workload

3.Getting a bookkeeper or accountant to take care of taxes and finance

taking time off.

7.Work towards a goal

It’s a good idea to have a purpose when you start freelancing. For some, it’s the first step towards setting up a business. For others, it’s the opportunity to work on a pet project.

Once you’ve got a start, revisit your goals. Make sure the work you’re doing serves those aims:

Is it fun?

Is it profitable?

Are you attracting the sort of jobs you want to work on?

Is freelancing still worthwhile? And if not, what needs to change?

8.Know your tax obligations

Freelancers are self-employed in the eyes of the tax department, so your tax obligations will change. You shouldn’t be daunted by it, but you’ll want to consider:

setting up a basic bookkeeping system to track your expenses, plan your tax payments, and monitor your income

getting professional help by finding a bookkeeper or accountant

Make sure you know:

how much of your freelance income to set aside for tax time

what business expenses you can write off – such as travel, home office and equipment costs

How to freelance in a way that works for you

The freelance economy is booming. Most modern bosses are open to their workers freelancing on the side and technology has made it easy to do. But there are traps. Where you may have project and account managers to help you in your day job, freelancers often have to take care of everything. That includes estimating jobs, delivering projects on budget and getting taxes right. You’ll also need to regulate your workload to avoid burnout.

Fortunately, there are more tools out there to help you than there have ever been. And there’s a community of like-minded freelancers too. With a little persistence, you’ll figure out how to freelance in a way that suits your lifestyle and your goals.