MISTAKES that cost Small Business BIG $$

Did you know that most new businesses have limited cash flow on startup. Business owners perform the majority of tasks including invoicing, accounts, quotes, payroll, BAS as well as setting up their accounting system, mostly on the recommendation of their accountant.

Business owners must perform a variety of roles to get by. Mistakes in things such as bookkeeping, cost time and money:

  1. Not claiming business expenses correctly
  2. Incorrect GST claims
  3. Debtors out of control
  4. Underpaying/overpaying Staff
  5. Late BAS lodgments

As their business starts to grow, business owners have less time to focus on their financials as they need to put their resources into increasing sales for their growing business. As this occurs, their accounts start to suffer and mistakes start to happen. This can be costly for the business owner as they either try to fix their mistakes which can lead to more mistakes or engage their accountant to fix their problems – which can be a costly exercise.

Six Must Do’s for Businesses

When businesses start to grow, it is an opportune time to engage a bookkeeper to help with the running of your business before it gets out of hand. Here are six must do’s for small business:

  1. Account Payable/Receivable reviews ensuring that all income and expenses are allocated to the correct accounts
  2. Quarterly reviews that the correct GST amount has been lodged with the ATO
  3. Review your payroll processing and employees have accrued the right amount of leave
  4. Review your outstanding debtors list
  5. All superannuation payments are correct and lodged accurately – avoiding ATO penalties
  6. Software training provided to the business owner/staff so they are using their software correctly and accurately.

Having an accurate and up to date accounting system helps the business owner with their decision making. Firstly, it avoid fines for late BAS lodgments, secondly it can then help with tax planning with their accountant as it paints a more accurate picture of their business and lastly, it assists the business owner with planning on purchasing their next asset that will help grow their business.

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