As a small business owner, it is common to see that you are managing your accounts or in some instances, you might have handled your own accounting. Recent researches show that business owners have turned to professional bookkeepers because of errors that have costed them.
Everybody understands that it is easy to make calculation errors when working with figures and details. Are you aware of any mistakes the small businesses owners make? The following is five major pitfalls business owners often experience:
Maintaining accounts in order.
This is one of the most essential rules in accounting world. In addition to making sure you get the accounting calculation correct, you need to keep your accounts up to date. Many businesses do not send their tax invoice in a timely manner. Maintaining your own bookkeeping means you need to allocate your time on a weekly basis to maintain your books, tracking your financial transactions, filing your paper work, tax invoices and receipts in a good order.
Book an accredited professional.
Many business owners would hire an ad-hoc or temp freelancer to help with some light account keeping in their office? From the expert point of view, this is not a good practice. Bookkeeping must be taken seriously and there is no such thing as light accounting. In this case, you are attempting to save cost by trading experience. As a result, this could end up with an overwhelmed staff, errors and definitely unnecessary costs.
When hiring someone or a professional accounting company, you should ask the right questions. For example, ask them some particular questions about the accounting software that they are experienced with. You could also ask detailed questions including how to reconcile financial accounts on that software.
Managing your bookkeeper.
As a business owner, you need to understand on how to manage your accounting staff or accounting company. Define a clear set of bookkeeping procedures is one these tasks. For example, when do you want the invoices to be paid? Set the start of the fiscal calendar. When do you want to review your financial statements? Set the time frame as to when do you want to review your accounts payable and receivable. If you set the timeframe on each Friday, for example, make sure that they know this so they can prepare all the paper work one day before hand.
Reconciliation could be a daunting task and should be done on a monthly basis as per accounting standards. The benefit of this practice is to have your accounts and financials in a good order. This activity should include reconciliation on sales tax accounts, bank accounts, expenses including credit cards and salaries. If this task is not done properly, you will have inaccurate financial statements. Obviously this is something that everybody should avoid.
Have a backup plan.
It is also common to find high turnover in accounting jobs. To mitigate this, have your backup plan in case your bookkeeper or accountant resigns. This is where hiring an accounting company could be a benefit. A professional company would keep your business sustainable in terms of ensuring bookkeeping services are always available. Instead of depending upon unreliable accounting staff, you should consider hiring an accredited firm to keep the light on.
Getting your tax return, tax accountant requirements or bookkeeping services undertaken is undoubtedly our priority at WAdvisory.com.au. Get hold of us today, our company has expert resources in Sydney and Perth.