Common Small Business Accounting Mistakes
Running a small business on the Gold Coast, or anywhere for that matter, is very demanding. Not only do you have to keep up stock and manage staff, but you also have to stay on top of your books. And while small business accounting is one of the most important aspects of running a business, it’s often the one most overlooked.
Most Gold Coast small business owners don’t have the money to hire an in-house bookkeeper to tend to their small business accounting matters. However, this can result in many mistakes, costing you dearly. Even if you don’t have the funds to outsource all your bookkeeping and accounting requirements, it can pay to outsource particular tasks. (Our post, ‘Bookkeeping: What To Do In-house & What to Outsource,’ is a great article that can help you see what bookkeeping may be beneficial to outsource.)
When you’re time-poor, running your business and doing everything you can to keep it afloat takes priority, which is understandable. However, doing the books when you’re tired, leaving everything till BAS time, or worse, tax time, can lead to unwanted stress and costs you don’t have the time or capacity to deal with.
Thankfully, there is an easy solution to this problem: professional small business accountants. Small business accountants on the Gold Coast, such as those at Grow Advisory Group, can take care of all your small business accounting needs. Best of all, you’ll be outsourcing these tasks to us. So, our fees are much cheaper than those of a full-time bookkeeper or accountant.
We thought it wise to share common small business accounting mistakes with you to show the benefits of hiring professional small business accountants. If any of this rings true for you, it may be time to call Grow Advisory Group.
Putting Off Bookkeeping
Granted, when you’ve worked all day long-put out fires concerning staff, stock, and possibly even customers, the last thing you want to come home to is bookkeeping. However, it’s something that you should never put off. Even if you only find the time to sit down once a week, it can be the difference between the success and failure of a business.
If you fail to file your tax returns or financial statements on time, you might face hefty fines and even more severe issues, such as an audit. Maintaining excellent relations with suppliers and creditors is essential for running a successful small business. However, this may be difficult if you require constant reminders to pay your bills.
Hiring or outsourcing small business accountants on the Gold Coast may be the best option for those who find it challenging to keep track of their finances. Instead of trying to manage every aspect of your business alone, small business accounting services can provide year-round help.
Not Keeping Track of Cashflow
It’s easy to assume that money coming equals money in the bank, right? Well no. That isn’t always the case. You may not receive full payment upfront; the balance payment may be months away. Also, what happens if the timeframe runs over? That balance is even further away. So you need to be aware of such instances and make necessary allowances.
You can’t count your chickens before they hatch; the same applies to your finances. Keeping a constant eye on your finances and cash flow is vital. You need to ensure there’s money in the bank when there needs to be to pay for staff and supplies without spending it before you even have it.
It’s easy to make this small business accounting mistake. However, with the help of Grow Advisory Group’s small business accounting services, such a mistake is just as easily avoided.
Not Defining Contractors & Employees
Is your Gold Coast small business staffed? If so, do your employees work for you as full-time employees, or are they on a contract basis? Or are you unsure? Being unsure can get you in trouble.
You must be aware of the distinction between contractors and employees and the accounting repercussions of this difference. Failing to do so can lead to misrecording your finances, which can get you into trouble with the ATO.
Growing from a Sole Trader to taking on staff and contractors opens a doorway to confusion for many small business owners. You have to be aware of award wages, PAYG, Superannuation, entitlements, etc., which vary depending on their employee status. Nevertheless, it can be simplified with the aid of professional small business accountants.
To ensure you’re defining your staff correctly and recording your finances accurately, call Grow Advisory Group. We have the skills and experience to put you on track and meet your obligations.
Not Planning for Tax
I love tax, said nobody ever! While it’s tempting to ignore your tax requirements, doing so will do you no favours. Not documenting finances properly throughout the year will almost certainly lead to filing an incorrect tax return, which could result in jail time if found to be incorrect.
As painful as it may be, it’s vital to document every income and expense transaction. It is also very beneficial to lodge a BAS quarterly rather than annually. BAS helps businesses report and pay several tax liabilities, and staying on top of this quarterly makes annual tax time much less painless.
We all grow lazy with receipts and records. However, tracking them and lodging a BAS quarterly ensures a more straightforward, error-free and stress-free tax time. And, with Grow Advisory Group, all your tax planning needs are taken care of. Along with being Gold Coast small business accountants, we’re also tax planners and tax advisors. Contact our friendly team today.
Not Separating Business & Personal Finances
Small businesses frequently mix their personal and business finances. It’s understandable, especially if you’re business is just getting started. It’s much more convenient to continue using the same bank account you always have than to go to the bank, set up a new account, and wait for an access card to arrive to start using it.
However, that’s a bad idea. When it comes to taxes, distinguishing personal transactions from business activities can be difficult. Moreover, it may cause you to miss an opportunity to claim a business cost as a tax deduction. It may also be an issue when applying for a loan or credit line since lenders want a thorough and accurate picture of your business finances.
Wean yourself off using your personal and business bank accounts interchangeably. Set up a business bank account. Our Gold Coast business advisory services can review your business setup to ensure you’re set up for success.
Not Using Cloud-Based Accounting Software
Do you find it challenging to stay on top of your accounting responsibilities? Do you feel as if you’re drowning in a sea of paperwork? Or do you want to spend more time operating your business than handling the books? If you answered yes to any of these questions, it’s time to think about switching to cloud-based accounting software or switching from your present accounting software to a better fit.
Cloud-based accounting software is vital to the profitability of any small business. For new business owners, it’s an investment into the future, making bookkeeping and accounting easier and life simpler.
Cloud-based accounting software lets you manage your finances from a single online account. Moreover, it manages all accounting aspects, from payroll to invoicing and beyond. It also reduces the chance of human error, which can lead to all sorts of headaches.
If you want to switch to cloud-based bookkeeping but don’t have the training, time, skills, or know-how, Grow Advisory Group’s small business accounting services can help!
Not Availing Small Business Accountant Services
It’s easy to make bookkeeping or accounting mistakes, but is the error worth it? In the best-case scenario, you may overlook some deductions that could have saved you money. Worst-case scenario: you have no money to pay staff or suppliers or you end up in jail for lodging incorrect taxes.
Availing the help of professional small business accounting services can help reduce the risk of mistakes in areas like expenditure monitoring, prompt payment of suppliers, bank account balance, tax, and payroll tax.
Small business accounting services such as Grow Advisory Group, are more than accountants. They offer a full suite of business services, including bookkeeping, business advisory, and coaching. Therefore, they’re primed and positioned to help your business grow.
Conclusion
Running a small business on the Gold Coast is tough, and your small business accounting mistakes only make it tougher. To lighten your load, ease your burdens, and become more aware of your finances, you need to stop making common small business accounting mistakes.
Common accounting mistakes many small business owners make include putting off their bookkeeping duties, not keeping track of their cash flow, and not defining contractors and employees. Other equally common mistakes include not planning for taxes, not separating business finances from personal finances, and not using cloud-based accounting software. However, the greatest mistake is not taking advantage of professional small business accounting services such as those offered by Grow Advisory Group.
If you know you’re making some of these mistakes and want to irradiate them, please call Grow Advisory Group. With offices in Tweed Heads South, Nerang, and Varsity Lakes on the Gold Coast, we’re local and always on hand to help with your small business accounting, no matter how big or small they may be.
Contact Us Today!
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.
