When you’re in the first couple of years starting a business – unless you’re funded really well (and let’s face it, these days, it’s a rare occurrence), if you’re anything like most start-up owners, you’re probably scrimping and saving every spare drop of cash you can find – after all cash flow is king.
So when it comes to paying for someone else to do your book-keeping and accounting, you might be thinking;
- There’s not that much to do, so surely I could do it myself. Or
- I want to get a feel for it myself before I hand it over to someone else. Or
- Maybe it’s already in a bit of a mess and you want to clean it up somewhat before handing it on.
And these are all extremely reasonable thoughts to have. But what many, if not most, business owners find is that they are;
a) So busy doing what it is that their business requires in order to drive growth and revenue, that they don’t have time to do their books. Which means the books either get done in the wee small hours before their BAS is due (making their life a bit of a misery in the process) or they don’t get done at all (or at best, infrequently) and then they fall behind and miss various deadlines.
b) See a
c) See a, b and times it by x (if you answered point 3 above).
Now if you’re happy doing your own books and tax returns and you’ve managed to get it working for you, great. However, if it’s not, maybe it’s time to outsource.
If you’re not currently outsourcing, aside from missing deadlines (and we all know that’s something the ATO really doesn’t like for its patrons to do) what other issues might be going on in your business?
- You might be under or over-paying your tax. And whilst the ATO will willingly accept your overpayments, remember cash flow is king and given it’s your money, you may as well keep it in your pocket if you can
- Your GST might be being incorrectly accounted for
- You might even be liable for GST and not set up for it
- You could be missing out on some tax effective opportunities
- You might be missing out on interest on your money because your invoicing only gets done when you get around to it.
- You might not even be aware of which customers owe you money past 30 days (and if you don’t know, how can you possibly chase it).
- You might know who owes you money, but don’t want to have to chase it. But, did you know there are some companies that have a policy in place that says they won’t pay up until you’ve chased your invoice at least 4 times? So if you don’t follow up – you’ll never get paid.
- You’re not sure exactly how much you’ve made, how much you owe, whether you’re actually making any money.
These are just some of the issues that involving a bookkeeper and/or accountant can help solve for your business. They also have the experience of having guided many, many business owners through all sorts of the issues -business related, tax related and things that might be more aptly named ‘other’.
But just in case you’re not convinced yet that outsourcing might be the way to go I’ve three more reasons for you to consider.
If you outsource;
- Your financial administration is done and dusted routinely. You’ll have a better grasp on and more control over your business.
- You won’t have to do it. No more 3am finishes the day BAS is due or the worry that you’ll turn into the poster-boy (or girl) on the ATO’s most wanted list
- Research has shown you’re likely to get a significantly larger tax return.
A great book-keeper should have your books organised and ship-shape in a fairly short period of time (depending on how long you’ve been running and how long it’s been since your last BAS). Whereas a great accountant will not just look back, produce your year-end accounts and report your earnings to the ATO, they’ll partner with you looking forward to ensure your business is running at an optimal level and that you’re only paying as much tax as is absolutely required.