Articles on best practice bookkeeping.


We’ve previously discussed that sometimes the three core financial reports are not always enough to understand your business.

If you want to know where various departments in your organisation currently stand or you want to focus on specific aspects of your business, you need proper custom reporting.

Custom business reports are an important tool to increase efficiency and effectiveness in you day-to-day business operations. It supports organisational decision making and tells you the right questions to ask, by providing you access to the right information. When data is laid out in detail for each department, it is easy to understand, and it give you the information you need at a glance without going into the details or meeting with the department head every day.

By giving your staff the tools to monitor their performance on a weekly or monthly basis, you are able to make informed decisions at all levels of the organisation.

Custom business reporting improves the quality and transparency of information for key stakeholders in the company and allows them to make better informed decisions for the company. When you switch your focus from historical financial information (acquired from Balance Sheet, Profit and Loss Statement, Cash Flow Statement) that often fails at providing a more detailed picture of your business to incorporating relevant value drivers, management’s strategy, plans, opportunities, and risks, financial and non-financial performance measures, you are in a better position to make decisions for your business.

This improved custom business reporting model delivers a broader view of you organisation’s current performance and greater understanding of an entity’s future and what lies ahead for it. By looking at key aspects of your business you can create custom reporting to give you insights into what’s going on. You can look at using industry ratios as a starting point, such as the cost of wages per unit produced, total sales, total expense, etc.

Bookkeeping Charting

Custom business reports save you a lot of time. It helps you get exactly the information you are looking for in exactly the format you require it. Custom reports lay out information the way you want to see it. You can draw information from other databases into one place for you to assess the performance of your business and what steps are necessary to take in win future leads.

So, if you are looking for an efficient, quicker and reliable way to analyse your organisations’ profitability, custom business reporting contact Alexilum now to help you out.

Giving bonuses can be a great tool as an incentive for employees’s to improve performance or even reduce costs. It’s important to establish a measurable guide that the bonuses will be based upon otherwise they may see it as just another part of their pay and expect it without any effort.


The most common types of bonuses are based on sales made, but you can be creative with what you base your bonuses on to achieve specific outcomes. If you are tying bonuses to a specific outcome remember that it should be something the employee has control over otherwise there will be no motivation to do things better.

  • If you are aiming to improve sales, bonuses could be calculated either as a percentage of those sales or a fixed amount for each sale made.
  • If you are looking to reduce wastage, bonuses could be calculated based on the weight of material saved.

Start by identifying what the outcome should be and work out how that could be achieved. Then look at how staff specifically contribute to that outcome and how you could measure that contribution. From there it’s an easy step to work out how you could tie staff bonuses to that outcome.


For example your goal might be to increase profitability. Using our examples above we have identified that this can be done in two ways, firstly by increasing sales and secondly by decreasing wastage. Sales people might be rewarded with a 5% bonus on all sales above last years figures. Production staff might be rewarded with 10% of the cost of the reduced amount of product wasted compared to last year. As staff are motivated to either increase sales and reduce wastage costs the overall profitability will be improved.

While most bonuses tend to be monetary you could also offer non-monetary rewards such as shares, weekends away, free dinners etc.

Bookkeeping New Staff


Keep in mind that bonuses should be shown on a separate line on employee payslips over their normal wages. Also check that while most bonuses are not considered normal hours they can be considered as normal wages for the purposes of calculating superannuation.


Ensure you communicate clearly with staff about who is eligible for each bonus type, how it is calculated and when bonus payments will be made so there is no confusion or disappointment when bonus time comes around.

Bonus plans that are poorly communicated seldom motivate your employees. Employees consider bonus programs that are not clearly stated as suspicious.

Bonuses can increase productivity, motivation, and hard work among your employees. They can really drive a team to excel; but if it is poorly managed, they can actually make employees feel discouraged and dissatisfied. If your aim is to drive employee behaviour, you must pay bonuses promptly. Show your employees the emotional connection between their behaviour / performance and the reward. Make sure your employees receive bonuses bonus within the agreed time frame. By paying the bonus promptly, you make it easier to publicise the win that led to that bonus.

Next Steps

Contact us today if you need help with calculating your staff bonuses or any obligations that go with that.

The Standard Financial Reports

Recently we wrote about looking beyond the profit & loss report and understanding the role of the three core financial reports:

  • The profit & loss report shows the financial performance of the business over a period of time
  • The balance sheet shows the financial position of the business at a set point in time
  • The cash flow shows cash movement of the business over a period of time

Custom Reporting

While these provide a good overview of your businesses financial situation the structure of your accounts might still be hiding unseen issues or might not give you the answers you need to make the right decisions.

When you need to find the answer to a specific question or you need to focus on a single aspect of your business the three core financial reports may be too high and may not give you the answers you need.

This is where we need to start digging deeper and start getting into custom reporting that allows you to focus on certain aspects of your business. For example you may look at a profit and loss report that only shows:

  • Data within a specific time frame. For example you may have had a sale on and you need to check the performance of sales in that period compared to a similar period to see what the impact was.
  • Data for a specific division or department. You might have different departments, by looking at each department individually you can see how they are performing independently of the others.
  • Data for a specific region or store. If you have multiple stores one may be making a loss without you knowing it unless you can run reporting that focuses specifically on that store.
  • Data for a specific product. Check the performance of a given product by focusing on those sales only.

Knowing how you may need to ‘slice and dice’ your reporting means you can set everything up from the beginning to allow this. Most bookkeeping systems will allow you to categorise your transactions which you can then use as filters later on and focus on a given aspect of your business.

Bookkeeping Charting

Flexible custom reporting allows you to focus on the relevant information without the need to sift through huge amounts of data you don’t need, or accidentally exclude important information. You are able to drill down into fine details and discover possible insights you would not see otherwise. When you can break your data down into metrics that matter for your business, you can make smarter decisions and eliminate guesswork.

Key Requirements for Custom Reporting

Custom reporting relies on a few key requirements:

  1. Understanding what you are looking for – By either knowing the specific question you want answered or by at least specifying what particular aspect of the business you want to focus on we can determine what data to include or exclude from the report.
  2. Setting your data up for success – The reporting you can get out of a system is only as good as the quality of the data going into it. If you are not categorising your data entry or using the correct information there is no way to answer the first requirement above without manually sifting through the data to find what is relevant.

Running the Report

Most bookkeeping platforms like Xero, MYOB and QuickBooks have the ability to customise reports to a certain degree. Most will also allow you to filter your data based on categories you’ve set up.

If you’re stuck about how to set up your bookkeeping to get the most out of the information you’re putting in contact the team at Alexilum to help you use your data to answer the questions you’ve been looking for.

We can also create custom reports that are as individual as your business by using your data with our specialised tools and dig even deeper than what your bookkeeping system can do.

Making sure you have captured all the right information when starting a new staff member can save a lot of headaches later on and it’s easy to miss those details during the hectic first days and weeks when a new staff member begins.

The process begins before you even hold your first interview. Obviously by this stage you’ll have an idea of what kind of role you will be hiring for but have you written a position description? Having a well thought out position description can be helpful through out the entire process. Firstly it will help you define exactly what the responsibilities will be for that role so you have a good understanding of what to expect and what kind of applicant might be suitable. It can then be used to help you put together a thorough advertisement that will inform new applicants exactly what the position is about. If the new employee will be working under an award it can help you select the most appropriate minimum pay level by comparing it to the award classifications. The position description should then be provided to the employee as part of their employment agreement. Later on it can also be used as part of annual reviews as responsibilities may change or you want to gauge performance against their duties.

The next thing to consider is the employee agreement. You won’t be able to have this completed before hiring but you should have it mostly complete with the exception of some specific details. The employee agreement works hand in hand with the position description to give the employee a really good understanding of the expectations within the work environment and their role. The agreement should stipulate the employees details, their start date, the terms of their employment, remuneration and finally it might also lay out additional obligations like confidentiality.

Bookkeeping New Staff Interview

Starting a new job is stressful for most people so the first day is a good time to go through paperwork and gathering all of the required information rather than trying to go through job integral tasks.

As part of your welcome pack you should make sure you are getting the following information:

  • Employee Details – including legal name and address which is required for proper display on pay slips and end of payroll year reporting. Additionally you will want contact details such as a home or mobile number and a personal email address can also be helpful.
  • Tax Declaration Form – this is important for the preparation of pays and the calculation of tax withholding.
  • Bank Account Details – so you know where to transfer funds to, your system may also allow employees to have their pays made to multiple accounts.
  • Superannuation Fund Details – as there are regulated dates superannuation needs to be paid by you should get this information as soon as possible.
  • Emergency Contact Details – in case there is an issue you have other contacts you can call.

Depending on your work scenario there is other optional information that could be helpful:

  • Uniform Sizes – if your work provides these
  • Availability – for part time or casual employees

You might put together a hard copy pack of forms to capture the above information or you might be able to capture it online.

Our payroll system we use with our clients allows you to send out an email with a link to new employees so they can fill in all of this information online, straight into the payroll system. This reduces the chance of information being mistyped and saves you time as the employee puts their details straight into the payroll system. Once the employee has entered their information into the payroll system you can then double check everything and submit their tax declaration straight to the ATO online.


If you would like to find out more about how to capture the right information with your staff contact us today so we can help simplify your payroll process while you take care of business.

When I ask business owners about how things are going they generally say their profit and loss looks pretty good. The problem is that’s the only financial report that they look at and while it’s an important indicator on your business performance it doesn’t tell the whole story.

If you want to properly understand how your business is faring you need to look at three core financial reports:

  • Profit & Loss – also known as profit & loss report, statement of profit & loss or income statement
  • Balance Sheet – also known as a balance sheet report or statement of financial position
  • Cash Flow – also known as a cash flow report or statement of cashflow

All three reports are actually related and while each one focuses on a different aspect of your financial situation they work together to help you understand the overall picture.

Below we discuss all three reports and find out the reasons why business owners and managers need to look at them regularly.

Profit & Loss

The Profit & Loss report shows your financial performance over a period of time. It is made of two core sections, your income (also called revenue) and expenses. Depending on the type of business you have your expenses might be split into two sub-sections, cost of goods sold and general expenses otherwise it will just be one section called expenses.

  • Income/Revenue represents sales you have made
  • Expenses represents costs you have incurred
  • Cost of Goods Sold is a sub-type of expenses and is generally a type of expense when you sell physical goods
  • Profit is calculated as Income less Expenses and will give you either a Net Profit or a Net Loss figure

While this report is good at telling you what your sales and expenses have been it doesn’t tell you everything about your business, for example it doesn’t tell you if you owe someone money. It also doesn’t necessarily tell you how much money is coming in and out of your bank account.

Bookkeeping Analysis

Balance Sheet

The Balance Sheet represents the current financial position of your business at a fixed point in time. It’s generally set out in three sections:

  • Assets – This is anything that the business owns or is owed ie: your cash at the bank, furniture and equipment, sales you’ve made but haven’t been paid for yet
  • Liabilities – This is anything that the business owes someone else ie: a loan to a bank, superannuation you haven’t paid yet, purchases you haven’t paid for
  • Equity – This is the difference between Assets and Liabilities and represents the value to the owners

By understanding your Balance Sheet you can see what your current financial position is. For example generally if you have more assets than liabilities that would be a good position because it shows you have the capacity to pay off your debts while if your liabilities were higher than your assets you could have problems looming up ahead.

Bookkeeping Calculation

Cash Flow

The Cash Flow report shows what money is coming in and out of a business over a period of time. A lot of people think that the Profit & Loss report shows how much money is coming in and out of the business. This is not necessarily correct depending on how your bookkeeping is set up ie: if you buy some goods but don’t pay for them it might show as an expense on your Profit & Loss but in actual fact the money hasn’t been paid out yet, the same would go for sales made but you haven’t received payment yet.

The Cash Flow report specifically only looks at what cash is coming in and out of your business irrespective of what sales and expenses are appearing on the Profit & Loss report.

There are many different Cash Flow report formats and they tend to vary depending on your bookkeeping software. Generally though it will show how much money you have at the beginning of the period, what money has come in, what has been spent and how much is at the end.

Bringing it all Together

By understanding not only how each report looks at a different aspect of your business but by also understanding how they work together you can get a much better understanding of where you are financially.

If you would like some help on better understanding your own business contact us today and we can show you how to get the most out of your bookkeeping.

Whether you’re just starting to hire staff or you’re wondering if there is a better way to manage your payroll there are a number of things you should consider. To weed through the many payroll systems out there, you need to know what features to look for.

Using a fully featured payroll system can help you save valuable time and money so you can put all your focus on growing your business. You don’t have to be a payroll expert to use a payroll software, you just need to use a system that smoothly integrates with your business needs. Like most business systems you can now use online services for managing your payroll so you don’t have to worry about installation, updates and backups. Moreover, it gives you the freedom to manage and run your payroll from anywhere.

Choosing a payroll system can be easy when you pay attention to key factors. Consider what features you need from the below as that will help you pick the best payroll system for your small business.


One of the first things you could ask yourself is, does your business need rostering and time sheets? If so you should look for a payroll solution that has this built in or at least allows you to connect with another solution. This will save you large amounts of time doing data entry from your time sheet system to your payroll system.

A good solution will allow staff to set availability and apply for leave making it much easier for managers to build rosters to suit. Managers should also be able to see cost forecasts while building rosters to ensure they are within budget.

Time Sheets

If your staff use time sheets to record their hours you could use the old sign in/out sheet then manually enter that into your payroll system or you can look for one that allows staff to do it electronically. You can get solutions now where staff can easily check in and out either on a PC or even through an app on their phone and then managers can sign off those time sheets at the end of the pay period before the payroll is processed.

Payroll Details



A lot of bookkeeping solutions like Xero, MYOB and Quickbooks have payroll options some with more features than others. There are also a number of payroll solutions external to these which may have additional functionality. No matter which solution you decide to go with see if it will integrate directly with your bookkeeping system to save you having to manually enter the journals each pay period and reduce the chance of headaches caused by mistyped figures.

Self Service Portal & Smartphone Apps

You may also want more advanced features like an employee self service portal or smartphone apps where staff can keep their information up to date, get access to pay slips, request time off and some will even have the option for reimbursement requests.


There are two types of compliance when you should consider when choosing your next payroll system. Firstly you need to think about Wage & Award compliance ie are staff being paid the correct amounts and secondly are your statutory reports compliant with Government requirements.

Wages & Awards are a complex topic but some of the more advanced payroll systems now have award checking built into the product so when you do your payroll run it can help make sure staff are being paid what they should be.

With the introduction of Single Touch Payroll you must find a solution that supports this, especially if you have a larger workforce. Additionally consider if the system support any other regulatory requirements built in or if you have to manually deal with those.


Just like your bookkeeping system reporting in your payroll system is essential to understanding your business better. Ensure that the proposed solution has all the relevant reports to make it easier to understand your payroll situation and that will help you make better business decisions in the future.

Next Steps

Alexilum’s YourPayroll system is a full featured payroll solution that includes all of the above features and more. Contact us today to find out more about how we can make payroll easier for you.

A large number of business owners think they have a pretty good understanding of their business due to their ‘gut feeling’. Listening to your instinct can be helpful but you may not be seeing the whole picture. Sometimes you need to take a step back and just look at the facts. You should know how your business earns revenue, what are the current trends in the industry and how they affect strategic priorities, financial success, and key performance indicators of your business.

Business Reporting help business owners to identify problems, find opportunities and adapt to the changing market conditions. It helps you understand where your business currently stands, where it is going and whether or not it is headed for trouble. Business reports are a valuable tool for tracking and analysing business performance and overall business health. A well-documented report reveals nuances related to core business functions, and opens up opportunities to improve and make market gains.

A business report is an important document that reveals specific information about your business. It can attract investors to your business and can keep your employees abreast of your company’s goals and achievements.

Day-to-day running of any business is very time consuming. It hardly gives business owners any free time to step back for a moment and see the bigger picture. When you are focused on the daily issues, it can be hard to get a good feel about where your business is going. As a consequence:

  • Small problems can escalate if they are overlooked for too long.
  • Opportunities can get missed if they are not availed on time.
  • Changing market conditions can badly impact your business if you are unprepared.

Business reporting can gives you a fast and accurate insight into your business. It helps you to quickly spot problems that are not always apparent, find opportunities and adapt to changes in your market.



Your business generates tons of data everyday. Every transaction constituting creates data like sales, purchases, payroll and inventory movement. Business reporting helps you use this data intelligently. When your business reports are based on your data, you can easily know where your business stands and where it’s going. Many business use Cloud-based business reporting software that connect to your online accounting software and extracts all the required useful data.

Cloud-based business reporting software makes use of your business data and offer you the following:

  • Identifies your most profitable products or services
  • Identifies late payers
  • Improves your cash flow
  • Filters clients by different criteria
  • Analyses your work-in-progress
  • Tracks your sales trends
  • Understands how your employees work
  • Analyses your team’s day-to-day work travel
  • Learns about staff habits and patterns
  • Creates custom reports

Business reports can be tailored to identify trends and not reveal sensitive information to employees, investors or clients. They can also help considerably in informed decision making. Accurate business reporting keeps track of the revenues and expenses and helps you devise strategies to eliminate costs.

Next Steps

Need to find out more about business reporting then contact us today to see how our experienced team can help you.

Employees are the backbone of an organisation. Being an employer, it is your duty to ensure that all payments go off without a hitch, on-time and every time. This is a core commitment on your part with your employees in return for all the hard work they put in your business.

Being a business owner you have full control of the payroll process. You can make it as easy and effective as you can. Your payroll process should be such that you don’t get a headache every time you have to do a pay run and it shouldn’t take up all of your time when you should be working on your business.

Every business has the freedom to choose it’s own payroll schedule by figuring out which is the best for their outfit and employees.

The most common payroll schedules in Australia are weekly, fortnightly and monthly. Before selecting a pay schedule, you should consider the following questions:

  • How many employees do you have?
  • Does your award specify a pay period?
  • Do you pay your employees hourly or salary?
  • Do you pay your employees for overtime?
  • How much does it cost you to process the payroll?

Each pay schedule has its own advantages and disadvantages. Below we take a closer look at each of these payroll schedules.

1. Weekly

Employees who are paid weekly receive approximately 52 paychecks a year. Most companies choose Wednesday to pay for the previous week.

Pros: Being paid every week makes it easier for employees to budget their own personal expenses.Employees do not have to wait for a long time to be compensated for their overtime.

Cons: Weekly payments do not always coincide with calendar months, which can make budgeting a little more complicated. Such frequent payments can be time consuming and take people away from their regular work.

Salaries Label


2. Monthly

Having a monthly pay schedule can be convenient because it’s easier to budget and staff get paid on (nearly) the same date every month.

Pros: Running monthly reports and making monthly budgets make things easier. By sticking to one payroll per calendar month you employees will know when to expect their payment.

Cons: Getting paid once month can put a financial strain on some of your employees, especially the low-income tier. More frequent payments will help them manage their finances more easily and will better align with things like rent. Finally your selected monthly payment date may fall on weekends so then you have to work around those as well.

3. Fortnightly

Fortnightly payments are a great compromise between weekly and monthly payments and is the most popular payment cycle in Australia.

Pros: Employees will get two (sometimes three) pays a month making it easier for them to budget. It’s also very common for big expenses like rent and car repayments to be fortnightly as well. This is good for businesses because you’ll be making smaller payments on a regular basis without it completely consuming your week.

Cons: You’ll find that in two months of the year there will actually be three pays instead of two. The two months affected change nearly every year so be mindful of that when preparing your budgets.

Next Steps

If you need help with your payroll or budgeting contact us today so one of our experienced staff can set you on the right path.

Are you in the process of preparing a basic budget for your brand new startup?

Do you want to know the steps that can help you put a solid budget plan into action?

The process of budgeting for small business owners isn’t limited to figuring out where to get the cash to meet next month’s payroll or BAS bill. Budgeting is the most powerful financial tool that is available to a small-business owner. Being a small business owner, when you maintain a good short and long term financial plan, you take control of your cash flow instead of having it control you.

Having a sound budget gives you the power to make your financial goals a reality. It can help you meet your strategic goals as well. But when you are preparing a budget, make sure you don’t map out a budget that you cannot meet. An effective budget includes both a short-range, week-to-week plan for at least a month and at most a calendar year. Budget provides you a plan only for the income statement and you should also cover balance sheet, this will enable you to consider all potential cash-flow needs for your startup.

The process of preparing a budget for your startup or company should be highly structured and follow a schedule, so that it is complete and ready for use before the next financial year begins.

Cash Flow Diagram


Follow the steps below for setting up a realistic budget that will get you where you want to go and what you want to achieve.

1. Identify Your Goals

The first step in creating a budget is identifying the goals you have for your business. Think through what you want to accomplish with your business and how much profit you want to make.

2. Review Your Financial Statements in Detail

Do a thorough review of your business documents that include your income statement, balance sheet, past tax returns, outstanding debts, assets, liabilities and a projection of immediate cash flow. If you have a budget you’re using currently for your business, use that as that will serve as a starting point for the new budget.

3. Define the Costs

Figure out the specific costs associated with each of your identified goals. Break down each of your goals into an annual tangible amount of money and further break it down by months. Fill in all of the costs, and conduct research to generate an approximate cost for each item you do not have the cost of.

4. Create Your Basic Budget

Gather the information from your business documents and specific costs and put them down on a spreadsheet. Your budget should be a tool that you use in your business on a daily basis. It is not a document that you create and then forget.

These steps will help you start off good good but it may be inadequate when you have to manage your cash flow as well. Once you have the budget, you need to create a detailed cash flow forecast. A cash flow budget guides you making the right decisions to ensure comfortable liquidity for your business and helps organisations anticipate cash flow issues and resolve them on time.

Next Steps

If you’re still not sure what to do next contact us today so one of our experienced staff can give you a hand.

Are you ready for the Single Touch Payroll?

Are you wondering what it constitutes and how it will affect you?

What in Single Touch Payroll (STP)?

Single Touch Payroll (STP) is a new government initiative that is designed to simplify business-reporting obligations. It is introduced by the Australian Tax Office (ATO) for providing real time visibility over the accuracy and timeliness of organisations’ payroll processes. The goal of STP is to streamline the administration of employee payroll, tax and superannuation obligations for employers.

Effective from 1 July, 2018, all employers with 20 or more employees will be required to report payments such as salaries and wages, PAYG withholding and super information electronically through to the ATO directly from their payroll solutions at the same time they disburse salaries to their employees.

Employers who have fewer than 20 employees will also have the option of adopting STP earlier if they so choose but will become mandatory on them from next year, starting from 1 July 2019.

Adopting STP means that employers will not be required to complete any payment summaries for their employees at the end of the financial year because ATO would have received detailed payroll information in real time throughout the year. In short, there would be no need to manually submit collection of payments at the end of the year as all that would be done automatically.

Single Touch Payroll


How Does STP Work?

Each time employers pay their employees, they will report the tax and super information to ATO from their Single Touch Payroll (STP)-enabled payroll solution. They will not need to provide payment summaries to their employees for the payments they report through STP.

All employees will be able to view their complete payment information in ATO online services, that they can access through their myGov account.

How Does STP Affect Employers and Employees?

Effect on Employers

When employers report complete information of employee’s ordinary time earnings using STP, it enables ATO to calculate a reasonable estimate of their employees’ SG entitlements. In case employers are not paying the correct amounts, ATO will step in and require employers to pay their SG obligations. This will also reduce ATO’s reliance on employees to report non-compliance by employers.

STP will enable employers to take control and automate their payroll process. They will not be required to write cheques or manually input wages and superannuation data.

Affect on Employees

STP gives employees more control over their tax and superannuation balances. They will be able to monitor and actively manage them through their account on myGov. In addition to that, the ATO will make the following available to employees:

  • a drop-down list of all the superannuation funds the employee has a balance/account with;
    the default fund(s) of the employer; and
  • YTD payroll details, including superannuation balances and a consolidated view of all employers reporting for that employee.
  • Employee can also view and manage their tax position; they can consolidate superannuation balances and also apply for withholding variation if required, or correct TFN declaration details if necessary. STP relieves employees for being responsible for reporting non-payment of SG to the ATO.

Need More Information?

Contact us today to see how we can help you make sure your payroll is STP compliant.