DIY Bookkeeping Can Be Costly
- “I just do the bookkeeping myself”
- “My mum does the bookkeeping for me”
- “We can’t afford a bookkeeping so my second cousins Aunty neighbour does it for me”
I hear these way to often and it usually after a phone call for HELP! Bad bookkeeping will cost you more in the long run!
If you are a small business you may be tempted to do the bookkeeping yourself or getting someone you know to do it for you. Accounting mistakes can however hinder the growth of your business. These TOP 3 mistakes are very typical for businesses that are just starting out.
1 – Bookkeeping Inaccuracies Can Cause Problems
Business Owners are not Bookkeepers and hence they do not always know what to record, when to make records or how to make those records. Without the right records you are more likely to run into mistakes down the track.
You might end up with misrepresented financial figures that do not tell you the true state of the company’s financial health. This is dangerous because you will not know how to make accurate projections and risk future fines.
A example of this come from a recent client that phoned in distress that their business was no longer viable. They had worked so hard for so many year and it had come to the point that thought they needed to close their doors. The business had experienced exponential growth over the past 12 months, this is suppose to be a good things right?. They moved into a larger premises, hired more staff, more equipment and additional vehicles. BUT unfortunately continued to do the bookkeeping themselves – or attempted to anyway. Within my first visit I easily identified several bookkeeping errors
- Bank Reconciliations 5 month behind
- Credit Card Reconciliation not being done correctly
- Purchases of a new Motor Vehicle put to an expense account (not an asset)
- New Employee set-up incorrectly, both PAYG and Super liabilities
If you know anything about the general ledger, balance sheet or Profit and Loss you can only imagine how inaccurate these reports are! Not to mention the massive overpayments made to employees for superannuation – still think hiring a bookkeeper is too costly??
A good bookkeeper will help your business grow in the long run
07 5609 6697
2 – Weighting up your Time and Effort
Bookkeeping is not as easy as many business owners might think it is – well that is if you want it done right! It takes time and effort and if you are doing the bookkeeping yourself that means that other areas of your business suffer! Time is a VERY VALUABLE ASSET if you have a small business. There are many other things that you can do instead of spending your time buried deep in bookkeeping – the time you spend doing it yourself might end up costing you more that it would if your called in a professional bookkeeper!
You have probably heard it before’
Work on your business NOT in your business!
And there is very good reason for that! How long does it take you to do your bookkeeping? Ask yourself would this time be better spent chasing up on quotes? attending a local networking event? Talking to suppliers for better discounts? When you are a business owners the tasks are endless – make sure you are focused on the right ones for your skill set!
I recently had a call from a savvy business owner that had simply had enough of spending 4 hours a weeks on his bookkeeping and was never really 100% sure if he was going it right and it was never up to date. The business takes weekly, fortnightly and monthly direct debits from Ezidebit. The way the business owner was entering and recording these transactions in their Xero file was definitely not efficient at all! We have signed up the client on a monthly bookkeeping package tailored to his needs and we have given him back peace of mind that his books are always up to date – not to mention freeing up that 4 hours a week! With that 4 hours we now have monthly meeting to discuss his accurate reporting and discuss strategies for growth – our reporting packages can be found here!
3 – Difficulties in monitoring Cash Flow and Accounts Payable
There is a massive need for the observation and monitoring of the cash flow for any business and particularly for a business under duress! Doing it yourself does not help the situation and it is essential to have a professional bookkeeper to accurately and regularly maintain your records instead of updating your books on a quarterly basis just to lodge your BAS!
We can’t stress enough how important it is to maintain records and keep track of both your accounts payable and accounts receivable. Loosing track of what ha been paid or has not been paid is very easy when you are doing the bookkeeping yourself! Get this information out of your head and into a accurate and timely report!
Put Simply it is hazardous to record transaction improperly! Decision that are made on the performance of your entity will be incorrect! GST can be over or understated causing fines and penalties for the Australian Taxation Office. Payroll that is over stated is detrimental to any small business!
Take your time to do your research before hiring anyone to do your bookkeeping of you. It is important your bookkeeper has time for you – and the desire for excellence. Never accept mediocrity or excuses for poor performance. Quality is very important I would suggest that it is more important than price itself.
Your bookkeeper is your closest business ally!
- I can help your business grow!
- I have been running my own business for over 10 years
- I am a good conversationalist
- I am understanding, friendly and someone you can talk freely with
- I can ask the hard questions and tell you issues when they happen
- I will return your calls and email within 24 hours!
Book yourself a free consultation today – 07 5609 6697
If you are interested in more Services offered by Astute Administration Services;
- Onsite Bookkeeping Gold Coast
- Payroll Processing
- Catch-up Bookkeeping
- Start-up Bookkeeping
- Business Reporting
- Bookkeeping Services
We are a Gold Coast based Bookkeeping Business servicing all areas of Australia