Whether you get to BAS late or don't have time to chase down debt, here are five classic signs you might need an bookkeeper. Does anything sound familiar?
Most people start a business because they are good at something - be it plumbing, photography, or design - and not because they are good at paperwork.
If you run a simple business - by that we mean contract with a handful of clients all year round, work from home, have no employees and have minimal expenses - you can absolutely manage your own accounting by using simple accounting packages like MYOB Essentials or even Microsoft Excel.
However, as an bookkeeper, I meet a lot of small business people who are great at what they do, but just don't "get" the compliance side of running a business. Still, they insist on doing it themselves to save money. The reality is that these are people who:
end up spending more money on their tax clerk at the time of the tax, as he / she will have to figure out what has or hasn't been done and fix their accounts, or worse, rebuild them so they are in a usable condition.
risk breaking the law and incurring fines and penalties for really unaware of regulations - for example, the threshold at which they must register for GST
lack of integrity in their accounting system because they either haven't set it up properly or make the same mistakes repeatedly - meaning their accounting system doesn't give them an accurate picture of how their business is actually performing.
So when exactly does it become worthwhile to hire an bookkeeper? This is different for everyone and for every company. The answer is not how much you turn over, but rather it is about your situation, your financial expertise and the complexity of the business.
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You're Too Busy To Do Your Billing - We've all heard the mantra 'cash is king'. The moment you get too busy sending invoices, cash flow will suffer and there is a risk that invoices will be missed altogether.
When Customers Are Not Chased for Money - Another important sign is that your customers are not paying and you don't have time or don't want to go after them because you don't want to risk the relationship. Whenever possible, it's a good idea to separate the face of the business from the debt collection - the old good agent / bad agent. It helps keep the customer relationship warm and blurry, but keeps the money in.
When things get more complex - When you hire employees or subcontractors, you are entering a whole new domain of business. Regulations increase exponentially once you hire staff. A common misconception is that if you only hire contractors and not employees, the rules don't apply. This is far from the truth and each situation should be assessed individually - especially if your contractor is working alone. Professional bookkeepers are aware of the legislation and can advise you on your legal obligations.
If you are really behind in your accounting - In this case, you may miss claiming GST refunded from the ATO or deductions from your tax returns. Many people don't realize that there are time limits that dictate how long after the event you can actually claim. In addition to missing claims, a backlog in your accounting can lead you to make decisions based on figures that are incomplete or incorrect. In this situation, you cannot make informed, informed decisions - decisions on which the future of your business can depend.
If You Are Consistently Late Filing BAS or Tax Returns - The ATO gets serious about late filings, with fines of up to $ 850 for each late filing. If you are consistently late with your lodging, hiring an bookkeeper can pay for itself. Fines and fines are not tax deductible - professional BAS agents' fees are.
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