Most people set up a small business because they are particularly good at one thing. They want to bring this product or service to the marketplace, provide great value for money and earn a nice living in return. This theory is fine, but in practice, running a small business can be especially challenging in the early days. The small business owner will quickly find that they need to master several other areas as well, simply to ensure that the business can operate as it should. Certainly it can be tempting, and often necessary, to take on all these additional tasks yourself, but you may be foolish if you do so in one particular area. Why should you always outsource your bookkeeping requirements to an expert?
There are some areas in which mistakes could cost you dearly, and this is one of them. You may be tempted to save money by doing all those other tasks yourself, but errors here can be punitive. The ATO will expect you to know what you're doing and will very rarely take ignorance as a valid excuse, should mistakes come to the forefront. You will have to carefully calculate income and expenditure to ensure that you are paying the right amount of tax, and so that you fill in forms like the BAS correctly.
Tax penalties aside, you should also keep your liabilities to the legal minimum as well. Certainly, fines and penalties that relate to late reports and understated income can be nasty, but do you really know your tax code, and have you taken advantage of all your deductions?
Ready for Anything?
A professional will be able to keep all your financial details in good condition and ready for any audit, should one be called. The bookkeeper will ensure that all corresponding paperwork is available to help you back up any claims that you make, and will also use the latest software to make the entire job a lot easier.
While you may realise the advantages of working with a bookkeeper, you may still feel that you could do this all yourself and have allocated a certain amount of time each week to do so. However, what happens when the chips are down, and you come across an unexpected problem in a key area of operation? All of a sudden, your time management is not quite so precise, and this will frequently mean that bookkeeping activities take a back seat. This type of behaviour can quickly compound itself, and before you know it, your records are dishevelled.
Do it the Right Way
Don't run the risk of failure caused by inadequate bookkeeping practices in the early days of your business. Make sure that you allocate some of your operational budget effectively and bring in a bookkeeper from day one.Share
4 February 2019
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.