Some small business owners have the mistaken belief that as long as they have all their paperwork together stashed in one box that they’re doing a good job with their finances. Nothing could be further from the truth.
Bookkeepers generally charge by the hour so the additional time it takes them to sort and categorise your paperwork will end up costing you more than if you’d spent a little time organising your paperwork.
Also when a bookkeeper only looks at your paperwork once a year it can be difficult to answer questions about specific expenses when so much time has passed by. This may mean missing out on an important business expense because you can’t give an adequate explanation for it.
Not only that, but most businesses typically must submit Business Activity Statements to the ATO either monthly or quarterly. If your information is kept in a box, this makes getting reports in on time that much more difficult.
Furthermore, business owners who dump all their receipts in a box, bag or folder till the end of the financial year have no idea how they’re doing financially throughout the fiscal year. They can’t tell if they’re spending too much or bringing in enough revenue to make a profit. They tend to judge their finances by the balance in their bank account, which doesn’t take into account monies owed by them or to them.
So if you are a small business owner who is not using an accounting or bookkeeping system, you really need to consider whether this is saving you money or whether it’s time to find yourself a bookkeeper or invest in an accounting software that will help you do the job.
Contact us on (03) 9563 3583 if you need assistance with your bookkeeping needs or if you would like us to set you up with a bookkeeping software that is appropriate for your business.