When a business is new and revenues are inconsistent, its owner may be tempted to cut as many costs as possible. They may want to reduce the size of their overheads budget and try to take on certain tasks by themselves simply to save money. Unfortunately, this is often the case when it comes to bookkeeping, and some owners tend to downplay the importance of employing a professional. Yet this approach can be shortsighted and, in the worst-case scenario, could even lead to unwanted costs and penalties. So if you're in this situation, why do you need to think carefully about outsourcing your bookkeeping activities?
Too Much Reliance on Software Packages
It is certainly true to say that there are many different accounting software packages around. Many of these market themselves to sole traders on the basis that their system is intuitive and adequate for your business. However, you may still need certain bookkeeping knowledge if you are to avoid any mistakes and ensure that all your records are where they should be. And don't forget that if you input the wrong details at the start, the information you get out at the end will also be incorrect,
Don't underestimate the potential risk of submitting documents to the tax authority that may contain errors. The ATO tends to be unforgiving and may impose penalties and back tax should these errors come to light.
Also, you must ensure that you meet the relevant tax deadlines, especially when it comes to BAS. If you're overworked and trying to take too many things on, one or more of these deadlines may slip past. You won't be happy if you receive a failure to lodge penalty in due course.
There could be even bigger problems on the horizon if you make any mistakes when it comes to your employee superannuation. As you may know, you need to make your own contribution to this pot, and if you forget or fail to do so, the ATO will take a dim view. Unfortunately, there can be quite a lot of work involved in handling payroll and calculating superannuation, which is where a certified bookkeeper will come in handy.
Bookkeepers can also handle invoicing, statements and debt collection. If you don't keep on top of this, you may face big issues with your cash flow.
Your Best Approach
These are just some of the areas where a bookkeeper can help. Don't be tempted to take a DIY approach to bookkeeping in your early days at the helm, as this could simply represent a false economy.
For more information about bookkeeping services, contact a local company.