All businesses in Australia are required to provide financial documents to the Tax Department. Big businesses often have a team of accountants and bookkeepers, but what about small businesses? Whether you are a sole trader just starting up, or you are an established small business with a small team of employees, employing your own bookkeeper full time is probably not an option you can afford.
But having a bookkeeper is crucial for many reasons and they can help your business in numerous ways. It is good to know that wherever you are up to in your business journey, there is help available.
There are many types of small business; sole traders, self-employed, partnerships, and limited companies. By definition, small businesses have fewer than 20 employees. This means that owners are very hands on and have to spend long hours focusing on generating income, paying costs, marketing and the daily operations of their business. They do not have the luxury that large businesses have in being able to delegate activities to other people. The result is that it is very easy to for paperwork to pile up quickly, become disorganised, neglected, or even lost, and this can have serious negative repercussions for the business.
There are many ways a bookkeeper can help your business. The very first thing a bookkeeper will do is to meet with you and work out your business needs. They will examine your current bookkeeping and payroll systems and, if necessary, can make recommendations on what system is good for your business.
Advising on accounting systems and software
If your business is new, you have already been ploughing through a myriad of regulations just to set it up. You are heavily focused on getting your business off the ground and most people have no idea about accounting systems, software, or taxation laws. A bookkeeper has the expertise to set up your bookkeeping system right from the start.
If your business is already established, a bookkeeper can improve and streamline existing processes. For example, many small businesses still keep their accounts manually to save costs. But manual data entry is both time consuming and liable to errors. Using accounting software reduces these inevitable errors and saves you a lot of time because you no longer have to double up on paperwork.
Your bookkeeper can advise you on which accounting software is most suitable for you and your business. If you already use accounting software, they can assess whether your existing software is the best option for your business and make recommendations. For example, Quickbooks is easy to use and may be a good option if you are self-employed, whereas for a business which is growing, Xero or MYOB may suit your business accounting needs better. Your bookkeeper has a good knowledge of the various software available, their strengths and limitations, and is well-placed to advise you. They can set up the software for you and train you how to use it.
Having the right software will save you a lot of time and money. Invoicing and paying many bills can be done instantly and electronically, even from your phone. You can see in real time what has been paid, what has not, and how much you have in your bank account. Your bookkeeper also has access to the software, so they can also see in real time how your business is doing and compile reports directly from the software. This dramatically reduces the amount of time you need to spend face to face with your bookkeeper and so reduces your costs.
A bookkeeper can also do your day to day bookkeeping tasks. They can keep on top of every transaction and will have a clear view of how your business is performing. Even if you only have a jumbled pile of invoices and receipts, your bookkeeper can sort it out and ensure everything is reconciled. If there are any missing invoices or receipts, they will let you know so you can chase them up. Your bookkeeper can also bring you up-to-date if you have fallen behind.
Keeping balanced books is crucial to the success of your business. You will be able to see if you have missed paying any bills which will keep your suppliers happy. You will also see who has not paid you so you can chase up payments if necessary. A business can lose a surprising amount of money when transactions are not tracked properly.
You can also learn from your bookkeeper how to manage and store your paperwork efficiently. When your paperwork is organised, your bookkeeper won’t have to spend time sorting things out and you can save yourself some bookkeeping fees.
One of the most valuable contributions a bookkeeper makes to a small business is ensuring your business complies with its legal obligations. A bookkeeper is a qualified professional who is obligated to stay up-to-date with the ever-changing complexity of Australian taxation laws. https://www.icb.org.au/
Your bookkeeper will ensure that your business is compliance with ATO laws and you will avoid any fines.
Your bookkeeper will:
• processing purchases, sales, receipts, and payments
• perform data entry and bank reconciliation
• prepare and lodge BAS and IAS as required
• manage accounts payable and receivable
• prepare your books for tax returns
• processing payroll, entitlements and superannuation
• preparing management reports
• communicating to the ATO on your behalf
Your bookkeeper can help you keep up-to-date with invoices and bills, and they can see clearly how your business is performing both at any given moment and over a period of time. Because they are checking your finances regularly, they often have a clearer idea of how a business is performing than the owner does. If a downward trend is occurring, they can bring it to your attention and advise you exactly where the problem is. This allows you to deal with any issues early and help to keep your business profitable.
There are so many ways a bookkeeper can help you and your business. You can have peace of mind knowing that your business is under the watchful eye of a qualified professional. Having a bookkeeper takes a lot of pressure off you so you have more time to concentrate on building your business.