A small business owner ends up wearing many hats in order to lead their business to success. There are times however, when some of these tasks should be outsourced. One of these is bookkeeping to assist with accurate financial accounting for the business. There are a number of many benefits to putting this into the hands of a qualified bookkeeper.
Year End Financials
One of the most important times of the year when relying on the financial figures for the business is the filing of the year-end tax report. Accountants are commonly utilized to complete this work , which they rely on accurate financial records in order to prepare reliable financial statements. . When the accountant is supplied with proper figures to work with, it means all of the potential tax incentives can be taken advantage of. It also means less room for error and less chance of implications for the ATO. .
Relying on the Bookkeeper’s Expertise
Most often, small business owners are not well trained in proper accounting procedures. They may be able to keep track of the financial documentation that comes with running a business, but that’s as far as it goes. Putting each financial transaction in its proper category is important for accurate financial accounting. This often does not get done when the business owner is doing their own record keeping.
The Importance of Accurate Record Keeping
The financial statements that are generated from the bookkeeping records are not just important for the year-end report. They should be used as a source of reference throughout the year for making important business decisions. The income and profit statement can be heavily relied on to see how the business is actually tracking . If expenses are too high then corrective measures to reduce them can be implemented.
Having a bookkeeper to complete and maintain your financial records creates a great resource for being able to do yearly comparisons. The information these properly completed records provide allows for the compilation of your balance sheet. You can use this to look back to see how you are doing compared to previous years. This will help you to make decisions that will affect the future of your business.
Using Well-Documented Finance Records
There may come a time in your business when you y need to borrow some money. Your financial records are going to be instrumental towards obtaining this potential finance. . Any commercial lender will want to see these records to assess how stable the business is, and review the cash flow condition.. They will also take into account how well prepared and accurate these statements are. It all begins with the bookkeeper.
The Prevention of Major Mistakes
A quality bookkeeper is able to correctly determine what are deductible business expenses and what are not. . Many times, business owners are under the impression that everything they buy for their business can be written off as an expense, which is not necessarily the case. This is just one type of common error that is often seen when a businessperson attempts to complete their own bookkeeping.
Prohibits Lazy Habits
It is common for the business owner to try and rely on their memory when it comes to bringing their accounting records up to date. A good bookkeeper will not allow this. They will insist on a proper paper trail, which in turn keeps the business compliant with the ATO requirements.
Frees Up Valuable Time
As a business owner, most of your time is probably spent on other important areas of your business. Bookkeeping can be both time consuming and frustrating. Putting this into the hands of an expert means it is being done right and eliminates this additional task you have to completed. You also won’t have to rely on other staff members whose area of expertise may not be in bookkeeping, but is better suited for other administrative tasks.
The Learning Curve
Most bookkeeping is now being completed in conjunction with modern day technology, commonly utilizing cloud software solutions While many of the available products are being promoted as user friendly, they still create a need for some basic knowledge in accounting practices. Without this, it can be a nightmare trying to learn and utilise the software properly. It is a tool that a quality bookkeeper can rely on to provide you with an even better service. It means a lot less paper to file and records to store.
In the end, when you add up all of the benefits of what a bookkeeping service can provide, it far outweighs the cost for paying for this. It is a potential money saver by having the financial dealings of your business organised. It creates time efficiencies as it frees up the business owner from having to worry about this aspect. It provides a regular snap shot of how the business is tracking financially. . It is a resource that can be relied on in the event the ATO has questions or for some reason wants to perform an audit.
The decision as to how often a bookkeeping service is necessary will depend on the size of your business, your specific business requirements and the number of financial dealings that take place on a regular basis. Most often, bookkeeping services can be arranged on either a full- or part-time basis, with works being carried out weekly, fortnightly, monthly or quarterly.