When starting your own business, cutting costs by avoiding unnecessary spending is the technique you want to employ. To some business owners, hiring a bookkeeper is tantamount to an expensive luxury. Some would rather resort to DIY bookkeeping to file or fill out the necessary paperwork. However, not hiring a bookkeeper can also be a costly mistake because a simple task such as preparing your financial report must be done accurately.
What does a company without a bookkeeper look like?
You struggle with growing your business: Business owners consider growing their business as one of their top priorities. With the help of your bookkeeper, you will be able to know the next step you are going to take. A business that is doing well is a good sign that it is ready for expansion. When there is no one to take care of your finances, you will not be able to make sound decisions. A bookkeeper is responsible for preparing your financial report, which the accountant uses as reference for providing advice or recommendations.
You do not have access to valuable source of information: A business owner will not be able to reap tax benefits unless deeper understanding of tax code is gained. Tax code is changing and a bookkeeper knows what it is and can update you of the changes so you can maximise its benefits.
You will have difficulties tracking your personal expenses: Running a business is hard let alone tracking your personal expenses. When you have too many tasks to carry out, it seems hard to juggle multiple jobs at the same time. Your bookkeeper can help you monitor your expenses by ensuring that you have separate personal and business accounts. Mixing the two can spell disaster because this triggers an audit from the ATO. When ATO audits your business, the burden of proof will be on you as you need to prove that the questionable expenses are indeed business related.
You lose money as you waste time: A bookkeeper helps you focus on other valuable aspects of your business while they take care of your finances. For a business owner, time is money. This is why it is a rule of thumb for business owners to carry out tasks in an efficient manner. When you have a bookkeeper to remind you of your payment deadlines, you can prevent paying fines and penalties.
Essential documents bookkeepers prepare:
• Financial reports-this report helps you monitor your financial progress so you can make adjustments where necessary. If you are going to wait for a year before you review your financial report, you will be missing out on checking crucial information, which could have saved your business from closing down.
• Quarterly taxes-paying estimated taxes quarterly is also an essential business obligation you need to fulfil. Tax payments include deduction, taxable income, gross income, credits for the calendar year and taxes.
• Paying salaries-a business that becomes profitable will require additional payment obligations such as paying additional taxes and salaries. These things can be hard to deal with without putting a bookkeeping system in place.