Are you spending more time recording and managing your business books than focusing on your business growth strategy? If the answer is yes, you might need a professional bookkeeper who can help you keep a record of all transactions to help you stay on top of your business books.
When should you upgrade your bookkeeping?
There are some signs that could help you know that it’s the right time to upgrade your bookkeeping for your business. Upgrading bookkeeping for small businesses is a big task, and bookkeepers can help you. The following are some signs you should consider:
Spending more time managing business books than your business
If your DIY bookkeeping system is consuming all your time, who is managing your business? Many business owners spend countless hours entering transactions and fixing accounting mistakes. This valuable time could be better used to attract new clients or brainstorm fresh marketing strategies.
It’s also crucial to understand the distinction between an accountant and a bookkeeper. If your in-house accountant is also handling daily bookkeeping tasks, they may be neglecting important business functions, such as payroll.
Struggling to stay on top of your bookkeeping
It seems like you are struggling to stay on top of your bookkeeping. No surprise there — larger businesses come with more complicated financial records. If catch-up bookkeeping is your only method, that’s a problem. Without an accurate view of your accounts payable and receivable when needed, the financial health of your business will be at risk.
When you try to manage your business books on your own, most probably, you’ll make mistakes. With the increased complexity of financial transactions, there will be a high risk of missing transactions or recording wrong data. In this case, you need to switch from single-entry to double-entry bookkeeping.
Your business’s tax season is always stressful
Do you find yourself in a stressful situation during tax season? Tax season means monitoring income tax rates for business, fringe benefits tax, capital gains tax, GST, PAYG withholding, tax deductions, tax credits, payroll taxes, and more. Additionally, staying compliant is the best way to avoid government penalties. A tax return accountant can help you with tax lodgment to prevent you from paying unnecessary penalties.
Unpredictable cash flow
An effective bookkeeping system helps you with business strategy. With accurate business books, you can estimate overhead costs, peak season, and low season. Another sign that it is the right time to upgrade your bookkeeping is that you can’t estimate your cash flow. While there could be other reasons as well, inaccurate record-keeping can also make it hard to forecast your accounts receivable.
Making costly mistakes
Managing your own accounts can lead to unintentional errors due to a lack of knowledge, resulting in costly bookkeeping corrections later on. That’s why it would be worth choosing bookkeeping services for your business to avoid making costly mistakes.
What are the primary bookkeeping duties?
The bookkeeping process involves a number of tasks, such as:
- Record-keeping is the primary function involved in the bookkeeping process. A bookkeeper will help you record sales, purchases, and expenses and maintain receipts. Accurate record-keeping is essential to understand your outgoings and incomings. Additionally, it will also help you understand what deductions you are liable to claim from the ATO.
- Once you have accurate records, it’s crucial to reconcile them. Bank reconciliation is the best way to double-check your expense or sales records against your bank statements. With bank account reconciliation, you will identify if there are any errors in your records.
- Accounts receivable include both reporting and chasing of late invoice payments. On the other hand, accounts payable involves ensuring you pay outstanding invoices on time.
- Your daily payroll tasks involve ensuring you pay your employees on time as per employee agreement.
Conclusion
The blog shares signs when you need to upgrade your bookkeeping for your business. If you are unable to manage your business books, you must get Reliable Bookkeeping Services. We specialise in recording and maintaining business books to help you stay on top of your business finances.