Small Business Accounting Basics: A Beginner’s Guide

 

Small Business Accounting Basics:
A Beginner’s Guide

I’ve reviewed the information you’ve provided for your mum’s 2024 tax return and just have a couple of things I’d like to confirm before I proceed with lodgement. Firstly, could you please confirm your dad’s date of birth, as well as his taxable income for the 2024 financial year? I also noticed something I wanted to check regarding the Telstra shareholdings. In the 2024 pre-filling report, only the smaller holding is showing, whereas in 2025 both holdings appear to be combined. My concern is that the larger Telstra holding may have been reported in your dad’s 2024 tax return instead. Would it be possible for you to check your dad’s 2024 lodged return (if you still have access to the records) to confirm whether the Telstra dividends were included there? At the moment, the reported Telstra dividend for your mum is quite low, which means the franking credits are also lower and this is resulting in a much smaller refund than we originally expected. I’m hoping that by confirming the correct income amounts and dividend reporting, we may be able to include any missing amounts correctly in your mum’s return. Often in a final year tax return, shares like these are included, however, more correctly they should either form part of the estate or be transferred directly to your mum. So it’s important that we make sure the Telstra dividends are reported accurately in the right return. Let me know once you’ve had a chance to check, or if you’d like me to walk through anything with you.

If you’re running a small business, understanding your numbers doesn’t have to feel overwhelming.

This guide is designed to give you a clear, practical overview of the key accounting concepts you need to feel confident in your finances.
 
Whether you’re just starting out or trying to get a better handle on your business, this page brings everything together in one place.

📌 What You’ll Learn

  • The difference between cash and accrual accounting
  • What BAS is and why it matters
  • How depreciation works
  • Common bookkeeping mistakes to avoid
  • The basics of reading your numbers

💰 Cash vs Accrual Accounting: Why It Matters

One of the first decisions you’ll make in your business is how you record income and expenses.

Cash accounting records money when it actually moves in or out of your bank account.

Accrual accounting records income and expenses when they are earned or incurred, regardless of when cash is received or paid.

👉 Read more: Cash vs Accruals: What’s the Difference and Why It Matters

 

🧾 Understanding BAS

If you’re registered for GST, you’ll need to lodge a Business Activity Statement (BAS) with the Australian Taxation Office (ATO).
 
Your BAS reports things like:
 
  • GST collected on sales
  • GST paid on expenses
  • PAYG withholding (if you have employees)
👉 Read more: Understanding BAS

📉 What is Depreciation?

Depreciation is how you account for the cost of business assets over time instead of all at once.
 
This applies to things like:
  • Equipment
  • Vehicles
  • Technology
 
👉 Read more: What is Depreciation? A Simple Guide for Small Business Owners

⚠️ Common Bookkeeping Mistakes

Even small errors in your bookkeeping can lead to bigger issues down the track.
 
Some common mistakes include:
  • Mixing personal and business expenses
  • Missing receipts or records
  • Incorrect GST coding
 
👉 Read more: Bookkeeping Errors: Common Mistakes and How to Avoid Them

📊 Understanding Your Numbers

Once your records are in order, the next step is actually using them to make decisions.
 
Your financial reports help you understand:
 
  • Whether your business is profitable
  • Where your money is going
  • How your business is performing over time
👉 Read more: Using Financial Reports to Make Better Business Decisions
👉 Read more: Understanding Equity: A Guide for Small Business Owners
👉 Coming soon:
  • Profit & Loss Explained
  • Balance Sheet Explained
  • Cash Flow vs Profit (Why profit doesn’t always mean cash in the bank)

🔗 Where to Next?

Once you’re comfortable with these basics, the next step is learning how to read your financial statements in more detail.
👉 Next guide: Understanding Financial Statements (Coming Soon)

🤝 Need Help?

If you’re feeling unsure or just want some guidance, I can help you get your bookkeeping set up, stay compliant, and understand what your numbers are telling you.
Reach out anytime — you don’t have to figure it all out on your own.

 

⚖️ Disclaimer

This information is general in nature and does not take into account your personal circumstances. It is not intended to be relied on as advice.
 
You should consider your own circumstances and seek professional advice before acting on any information provided.
 
Your use of this website is subject to my Website Disclaimer & Terms of Use, which outlines important limitations of liability and use of information.
 
Last updated: June 2026
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