If you are trying to keep costs down, it can often be tempting to do the majority of your administration in-house. However, when it comes to the bookkeeping, it can often be much better to outsource your accounting services to a qualified accountant.
Here are some ways that outsourcing bank reconciliations can save you money in the long term.
Correct allocation of items to lines
If you are in a rush, it can be easy to make mistakes in the process of reconciling your accounts. This can make it hard to track exactly how you are spending money within the company and compare the way money is being spent over similar time periods. If you get the amounts and locations wrong, you may have to pay for your accounts to be checked and the line items reallocated. This is often more expensive than getting them correctly allocated in the first place as the errors need to be found before they can be corrected.
Maximising tax deductions
By allocating items to the correct lines, you can ensure that your taxes are correct and that you have adequately claimed all of your allowable tax deductions. If you make mistakes and incorrectly claim too many deductions, not only will you develop a debt towards the Tax Office, but you may also find that you get fined or subject to further scrutiny over your tax matters in the future. Accountants can make sure that if an expense can be allocated to one of two areas, they will allocate it to the most appropriate and favourable area for your long-term tax planning. Accountants also have the time and capacity to keep up with changes in the tax code which may affect your business.
Efficiency
Sitting down to wade through receipts and line items can be time-consuming, particularly if you are not an experienced bookkeeper. Accounting services use staff who are regularly using your accounting system and can be much quicker and more efficient at doing the tasks. This leaves you free to concentrate on doing the activities which can help you to grow your business such as chasing up new sales contacts and organising more efficient processes.
If you have a small business, it can make sense to allocate your bank reconciliations to an accounting service that is experienced and efficient in doing these tasks. This can help to save you money and make sure your business is fulfilling all of its tax obligations.
Share13 September 2016
Hi, everyone. Nancy here. I am currently studying for my degree in mathematics. As part of the “maths in the workplace” component of my degree, I am doing an internship with an auditing firm. Of course, getting to apply maths in a practical setting has been an absolute joy, but there have been a number of frustrations too. It has been a real eye-opener to see how many businesses have a haphazard approach to accounting and book-keeping. One of the jobs the auditing firm undertakes is to recommend improved accounting practices. A number of businesses which have hired professional accountants since the last audit have definitely thrived! I hope this blog captures the beauty of applying mathematical principles to business and using tried and true accounting methods. I trust my entries add up properly to give you an equal share of information and inspiration. Thank you.