Professional Bookkeeping & Accounting Services Across Australia

The Australian Accounting Standards are issued by the Australian Accounting Standards Board (AASB) and are closely aligned with the International Financial Reporting Standards (IFRS). These standards guide the preparation and presentation of financial statements across entities. The Australian Taxation Office (ATO) is the national revenue authority responsible for administering and enforcing tax laws. It oversees compliance for taxes such as Income Tax, GST (Goods and Services Tax), Capital Gains Tax, and Fringe Benefits Tax, and manages periodic lodgements like BAS (Business Activity Statements).

Some of the imperative laws include: Corporations Act 2001, Income Tax Assessment Act 1936 (ITAA36), and Income Tax Assessment Act 1997 (ITAA97). These laws make sure that individuals and other forms of entities are honest and clear in their reporting.

In Australia, businesses commonly use two primary bookkeeping methods, in line with ATO (Australian Taxation Office) guidelines. Cash Basis records income and expenses when money is received or paid. Accrual Basis records them when earned or incurred, regardless of payment. The ATO allows most small businesses to choose between the cash or accrual basis for tax reporting. But, businesses with an annual turnover of $10 million or more are generally required to use the accrual method for financial reporting.

Australia uses the double-entry accounting system as the standard for businesses. It records each transaction in two accounts—debit and credit—ensuring accuracy and balance. This method is required under Australian Accounting Standards and supports reliable financial reporting, tax compliance, and decision-making. Single-entry is rarely used and is not ATO-compliant.

Bookkeeping is the first step in the accounting process. It involves the systematic recording of daily financial transactions of a business or individual. Accounting is the process of recording, classifying, summarizing, and interpreting financial

transactions of a business or individual. Bookkeeping

involves recording basic day-to-day financial transactions such as sales, purchases, receipts, payments, income, and expenses. It forms the foundation of financial record-keeping. Accounting is a broader process that includes bookkeeping, financial reporting, analysis, tax preparation, and auditing. It ensures that financial statements are accurately prepared to reflect the true financial health of the business. These statements help in evaluating performance, planning future transactions, taking corrective actions, and making prudent business decisions. While bookkeeping captures raw data, accounting interprets and presents it in a structured manner to support compliance, transparency, and informed financial management.

“Assets = Liabilities + Equity”

When a vendor sells goods worth $500 and the payment is not yet received, it is recorded as Accounts Receivable (an asset). This entry is part of the bookkeeping process, where transactions are documented and classified under relevant heads—here, Revenue (income) and Accounts Receivable (asset). Bookkeeping ensures accurate daily records of such transactions. The accounting process involves analyzing these recorded transactions to determine the total revenue, total receivables, and overall financial performance at the period-end. While bookkeeping is the base, accounting interprets and summarizes the data to support financial decisions and ensure compliance.

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At LK Accounting and Advisory, we provide reliable bookkeeping and accounting services for all types of entities—business or personal. We ensure your financial

transactions are recorded accurately and systematically, so you no longer have to worry about tracking where your money is going. We help you monitor profits and losses, manage accounts receivable/payable, understand your cash flow, and prepare clear and compliant financial statements. Our team uses widely accepted accounting software in Australia, such as Xero, QuickBooks, and MYOB, to keep your books updated and aligned with current standards. Whether you’re a freelancer, small business owner, or running a large company, we tailor our services to fit your needs. By outsourcing your accounting to us, you can save time, reduce costs, and focus more on growing your business while we handle the numbers with precision and care. Let us be your trusted financial partner.