Bookkeeping is a task that demands accuracy because the financial information is used for analysing the financial standing of a business. Taking on all your bookkeeping practices can be a problem in the long run especially if you do not have sufficient knowledge and training. Bookkeeping tasks should be left to a bookkeeping professional to ensure that everything is in order. One of the problems that business owners will face due to DIY bookkeeping is poorly submitted financial data. It is difficult to resolve ATO queries if your financial data indicate potential problems.
1. Losing records. Business owners often lose track of important receipts, which are used for filing tax returns and claiming for GST. These receipts need to be recorded regularly so you can present a detailed record to ATO in case they need it. When you resort to DIY bookkeeping, these important things are overlooked.
2. Unable to deal with bookkeeping software’s complexities. While the basics of bookkeeping software can be learned, there are still some complexities of bookkeeping software that you need to tackle so you will know what needs to be done. When there are underpayments on your tax returns, the tax office will penalise you for it. However, you can save yourself from the stress that the process gives when you leave your bookkeeping software to an expert.
3. Missing deadlines. Another way DIY bookkeeping can wreak havoc on your business is when you fail to lodge your tax payments on time. It is easy to keep track of important payment dates if you have a bookkeeping professional to deal with them. A bookkeeper will be the one to schedule and track due date so the necessary paperwork is completed on time.
4. Cannot track expenses. It is difficult to identify the receipts relevant to your business and tax deduction if you have missed out on tracking your expenses. Even in petty cash, you need to make sure that you know where your money is going. If you do not keep receipts, you just cannot claim for every receipt you have. This is going to create chaos in your business.
Business owners may think that hiring a bookkeeper is costly, but running a business without a bookkeeping professional spells more trouble. Before you decide on considering DIY bookkeeping, think about the advantages of having a bookkeeper to complete the task. You will not worry about your expenses and tax payments because a bookkeeper will take care of them.
Peter Broberg is a bookkeeping professional with over 20 years experience in the finance sector. With more than 2 decades of experience, Peter provides payroll and bookkeeping services on a professional level. His services cater to small and medium enterprises in Cannington, Kalamunda.