Bookkeeping Hack: 5 Mistakes That Could Cost Your Business

When small businesses are launched, many entrepreneurs tend to save a few valuable dollars and look after the bookkeeping tasks themselves. But as businesses grow, so too does the bookkeeping function and the requirements associated.

It isn’t long before the tasks become just as overwhelming, as they are tedious – and it’s no surprise that some business owners get themselves in a bit of a pickle!

So, let’s step inside the world of numbers and look at the most common bookkeeping mistakes and how you can avoid them.

1. Not having access to the most up-to-date financial data

Whether you use accounting software’s or not, the question remains: How can you make any crucial business decisions without having timely and accurate financial information on business performance?

Monthly reports are key! Ensuring your bank accounts are reconciled at least once a month will always set you up for success. This means ensuring your bank balance correctly reflects the same dollar signs displayed in your financial accounts.

*** One thing that should be flagged ***

Any discrepancies indicate there is a big, fat error!  So, to avoid a much larger headache down the track, we need to rectify this to ensure your financial data is up-to-date and accurate.

2. Not understanding your financial data

Similarly, how on earth is one able to make those same crucial business decisions if they haven’t the faintest idea on how to read or comprehend the financial data?

Having a bookkeeper is ideal, but bonus points if you have a bookkeeper that is also a qualified accountant.

At Grow Advisory Group, we cross every t and dot every i. You will always be advised on your financial position and performance in a way that you can fully comprehend. Our 360º business advisory model ensures we are leaving no stone unturned.

3. Not understanding which transactions are claimable, and which are not

Quite often, small businesses overlook certain claimable expenses. This is simply due to lack of knowledge or on the contrary, taking on board the wrong advice.

This can be detrimental over time and it truly can be the difference between a business paying tax or receiving a nice shiny refund to indulge in, courtesy of the ATO (and of course their own contributions to the economy).

Some commonly overlooked expenses include;

• Start-up costs
• Banking and accounting fees
• Home office expenses
• Staff deductions
• Bad debts

On the opposite, claiming an expense that is not claimable or private in nature can get you into serious hot water with Mr. Tax man. So best leave it to an expert to ensure your business is tax compliant and you are not in the firing line for fraudulent deductions.

4. Not paying your employees on-time

You don’t want to be known as ‘that guy’. You know, the boss that sometimes pays their employees on Mondays, sometimes Tuesdays; or if there was a public holiday and it completely slipped your mind, they might finally get their wages by Thursday. Eek!

Fret no more! Because the team at Grow Advisory Group can work with you to arrange the best time to process your payroll. Ensuring that your employees are paid on-time, at the same time, every week, fortnight, or month.

At the end of the day, it’s also your reputation on the line.  Like it or not, paying up is crucial in running a successful small business. As is, building strong lasting relationships particularly with the faces of your business. After all, they are the people taking care of your clients and customers!

5. Not being able to focus on the more important things in life

Running a small business is hard work at the best of times, but even harder if you are a business owner wearing multiple hats. After launching, many business owners have limited income and resources, so it’s a cost-effective choice to take on the bookkeeping too. However, as your business grows you will find your once flexible lifestyle, turn into a complete juggling act.

Then before you know it, you’re being pulled in too many directions, and as a consequence, not being truly productive in any area.

Conclusion

Whether you’re just starting out or have been ‘in the game’ a while, it’s no secret that a good bookkeeper is a business investment that will save you money and turbulent times in the long run.

To put a stop to the, let’s face it, totally torturous task of bookkeeping and give the expert team at Grow Advisory Group a call on (07) 5599 5700.

Whether you are located on the Tweed Coast; Gold Coast; or beyond, send us an email at  [email protected], to discuss how we can help you with your bookkeeping.

Connect with us today and get back to growing your business.

Disclaimer: The information contained in this blog is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from an accountant and/or financial adviser.