As a small business owner, sole trader or organisation you’re often managing several different areas of your business or making sure things are in order with accounting staff.
Bookkeeping is one of the most important thing, as if left unattended or not completed correctly – it can be a nightmare.
A startling statistic noted in Small Business Economics, is that about 33% of closed businesses were actually considered successful when they “failed.” There can be many reasons why a business closes, but you have to wonder- if this business owner kept better tabs on their bookkeeping and accounting, would things have turned out differently? Were the books telling an inaccurate story to the Unfortunately, what some misconstrue to be the “easy” task of bookkeeping can quickly become something that keeps you up at night- frankly, a nightmare.
1. Unorganised bank statements
Paperwork messes can be a huge drain on your pocket. Letting bank statements pile up can create a money leak, that may start small, but over time becomes a huge mess. If you find yourself shoving your bank statements into a drawer without checking them and overlook an error in your last deposit and then suddenly $100 is gone. It’s a pretty simple result; the more disorganized you are, the more money you are likely losing. Additionally, if your bank statements are muddled, you may find yourself making mistakes when recording transaction accounts which can have a domino effect on future months reconciliations. The easiest way to avoid a pile of bank statements is to outsource your bookkeeping and bas in Brisbane to 5ivestar business services.
2. Missing or Faded Receipts
If you purchase an expense and have misplaced the receipt, it can be a headache. Especially if that receipt is needed for company reimbursement. Most of us can refer back to our credit card statements if needed, but what if you paid in cash? Contact the vendor to reissue. To eliminate this issue all together, keep your receipts in one area and delegate time on a weekly basis to stay up to date.
3. Mixed Personal and Business Transactions
Mixing personal and business funds is a major headache waiting to happen. It’s one of the fastest ways to skew all of your accounts, and frankly a really slippery slope. It’s a basic rule to exclude your personal expenses from business expenses so you’re not using your business’ bank account or credit cards interchangeably. If for some reason this cannot be avoided, you can set up an account in your books and name it as “personal expenses”. From a bookkeeping point of view, you’ll end up investing more time determining which expense/income is for personal and for business. There’s also the risk of slip ups by overstating or understating your accounts for tax purposes. Separate bank accounts for your personal and business transactions are a no brainer.
4. Procrastinating on Journal Entries
It can be a nightmare if you’ve forgotten to make an entry, or have entered the wrong amount, or to the wrong account. Your next report will be unbalanced so you would need to go back on the reports you’ve sent already — which is a hassle, and can snowball over days, weeks, months, before the issue is isolated and resolved. Accurate journal entries are the backbone of accounting. They should be updated frequently to ensure all transactions are recorded correctly in the books. In short, any reports you might have leveraged will be rendered useless if the entries are incorrect. Don’t let the entries pile up by staying on top of them as frequently as possible (daily if you can). Check your work to make sure the details are correct and that there are no duplicate entries.
5. DIY bookkeeping
If you’re trying to save on overheads by doing your own bookkeeping, be sure to have done research, tutorials or had training be someone certified prior to diving in head first. The last thing you want to do is “wing it” when it comes to your businesses finances. Whether you’re a dental practise doing your own bookkeeping or looking to do your own bookkeeping and BAS as a real estate agent practise 5ivestar Business services offer training so you are up to speed, we are happy to provide advise when required or refresh training, or to do a ‘once over’ of your accounts.
Or save time, money and stress and outsource your bookkeeping and bas now.
Don’t let these bookkeeping nightmares happen to you! Outsource your Bookkeeper and BAS Agent today !
If you are in need of a Bookkeeper, BAS Agent, Turnaround Manager, Turnaround Consultant, Turnaround Advisor, Turnaround Specialist, Business Transformation Specialist or looking into CFO services – vCFO (Virtual CFO) | Interim CFO | Part Time CFO | Full Time CFO | Interim CFO 5ivestar Business Services can support you through your business turnaround.
5ivestar Business Services are tax agents located in Carina Heights on Brisbane’s Southside. We service all areas of Brisbane, Ipswich and the Sunshine Coast for tax, BAS and bookkeeping. We also practice as virtual CFOs, take on interim CFO engagements as well and financial management, reengineering and restructures including business turnarounds and transformations and expert financial modelling.
Let’s chat about your business today https://5ivestar.com.au/contact-us
P: 07 3084 3692