Unfortunately, you cannot escape from the awful task of bookkeeping in Sydney or anywhere. Though mundane, it’s a secret success weapon for your business, especially the small-scale ones. It helps the organization to keep accurate financials at the end of the financial year. Not to forget, it’s an everyday task (a basic concept overlooked in small businesses).
Poor bookkeeping management puts hurdles on the success of the business. Therefore, you should avoid common small business bookkeeping mistakes.
Here are six of them.
- Record Bookkeeping Daily
As the phrase goes, procrastination is the enemy of success. You shall not assassinate the opportunity. The majority of business owners skimp on these tasks easily, later on, getting on the guilt trips for messing up with the financial books. Additionally, this would miss crucial tax deadlines, creating loads of confusion down the road. So, record the transactions on a daily basis to avoid cumbersome work. Believe us - this would save you thousands of dollars while filing tax returns. - Engage With Bookkeeping Services
There’s no denial you must be a versatile person; however, it’s tough to attempt doing the bookkeeping task yourself. The major responsibility of a business owner is to make sure the financial statements are up-to-date. That doesn’t mean you should take this job too on your shoulder and make it heavy. And what if you lack accounting skills? Considering all these factors, it’s advisable to leave this task to professional bookkeepers in Sydney or anywhere as they’re well-versed with taxation rules and regulations. Not only will they offer quality services, but they’ll also commit to bringing profits to your company. - Categories The Expenses
Whosoever has been assigned the bookkeeping undertaking shall know the bookkeeping practices. Otherwise, you’d invite problems on your own. Monitor your income and expenses in suitable categories. Misclassifying employees, additionally, is serious trouble. In today’s times, business owners hire contractors, full-time employees and independent contractors. On that note, classifying employees and contractors become a necessity. So, make sure you put them under the correct category. For this, you want to hire a bookkeeper as they’ve knowledge of the tax implications on it. - Have Required Backups
Technological advancement is slackening off our job. Meanwhile, this is making us more reliant. Days of hard copies seem to have vanished, all thanks to Cloud hosting! No doubt, Cloud hosting is doing its job at its best; however, every technology has a set of limitations. And we, humans, have no control over technical glitches. Not to forget, cyber attack risks are high. Hence, it’s vital to have hard copies of receipts for bookkeeping. So, we would recommend not throwing them away post-recording in the Cloud hosting. - Report Sales Tax
Sales tax, nowadays, has become a serious concern, especially for small businesses. A sea of business owners doesn’t report sales tax. If truth be told, then this huge step can position you shedding money on fines and penalties. The laws have changed dramatically. Additionally, putting wrong entries for sales tax can also lead you to similar troubles. Therefore, never overlook stating sales tax in your financial statements. You can hire a reliable accountant in Sydney to void the problems. - Review Your Financial Books
Hiring a bookkeeper doesn’t imply you’ve done your job. As a business owner, whether small or big, you must impart knowledge on the contents of your financial statement. You would be required to make plenty of decisions for your business, wherein capital and profit and loss will play a key role. Not considering these factors would lead you to make a wrong decision. Therefore, make a habit of reviewing your financial books every quarter.
Conclusion
Indeed, bookkeeping in Sydney or any location is a crucial job in any venture’s success. By enforcing the above simple six steps, you’ll be able to keep away from the bookkeeping mistakes you were making until now. However, if you still have confusion with bookkeeping practices, then connect with a professional.
If you are thinking about selling your business in the coming years, keeping accurate and detailed book keeping records will play an important role towards a successful sale. Sydney Business Brokers have found that the most common reason that potential buyers get 'spooked' out of buying a business is when they find historical accounting records to be unclear, lacking in detail or to not follow a consistent trend over time. The prospect of selling your business in the future, is just one more reason why it is so important to avoid these six common accounting pitfalls.
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