These days there are numerous software programs which can help you to manage your business finances and submit your tax information to the Australian Tax Office (ATO). So, if you can do it yourself, do you need a bookkeeper? In fact, there are many good reasons why a bookkeeper is a valuable asset to you and your business.
The first benefit is to save you time. If you are running a business, you know that time is a precious commodity. Bills and invoices pile up rapidly and it can be very easy to lose track of what you have paid and what you haven’t, and what is still owing to you and what isn’t. You need to spend your valuable time keeping up with it.
A bookkeeper can do this for you. They can keep track of invoices and pay bills for you. You can have confidence that your suppliers are being paid and your bookkeeper can alert you to any customers who have not paid. They can also ensure that your bills are being paid on time which will keep your suppliers happy. This frees up your time so you can focus on the running of your business.
Balancing Books and Saving Money
While your bookkeeper is keeping an up-to-date record of all of your incomings and outgoings, they are also ensuring that your books are balancing correctly. They can alert you quickly if an invoice is missing so you are not scrambling at tax time to hunt down missing documentation. A bookkeeper can also follow up on outstanding invoices for you so that you can reduce pending income.
Instead of scrambling at tax time or when reports are due, keeping accurate and up-to-date records can also be a huge benefit to the success of your business because you will have a clear idea in real-time of how well your business is really doing. Your bookkeeper can alert you to areas where you are spending more than you are making, are less profitable or inefficient, and can monitor trends. Armed with this knowledge you will be able to make early decisions about how to improve your business such as managing cash flow better, or changing your marketing strategy, etc. As a busy business owner, you are probably focussing on the big picture and may miss some of the patterns that a bookkeeper is trained to see.
If you are thinking of inviting investors, a bookkeeper can help highlight the positive aspects of your business and show where you need to put money to improve your overall success. They also ensure that your tax obligations (BAS reports, PAYG, GST, etc) are paid on time which demonstrates to investors that your business has been able to fulfil its legal requirements. Investors scrutinise finances and expect to have all of the details when they make a decision. If the books are clear, concise, and accurate, investors are more apt to want to get involved.
Compliance is where a bookkeeper can be one of the most valuable assets you have. If you are running a business, you know that you are legally required to report your financial status to the Australian Tax Office (ATO) and pay certain taxes. The two key reports you must submit are Business Activity Statements (BAS) and the annual tax return. If your business is not in compliance with these laws, then you can incur heavy penalties.
BAS must be lodged correctly and on time. Its purpose is to declare how much GST your business owes to the ATO. BAS helps you to report and pay your:
- goods and services tax (GST)
- pay as you go (PAYG) instalments
- PAYG withholding tax
- other taxes
BAS can be lodged monthly, quarterly, or annually. If you are running your own business, it can be difficult to keep up with paperwork, remember when the reports are due, and so have reports ready and lodged when they need to be.
If you are late, you will receive reminder letters from the ATO that reports are due, or if your reports are inaccurate, they will be returned to you to amend. In the worst-case scenario, you could incur a financial penalty from the ATO for non-compliance. A bookkeeper who is a qualified BAS agent can save you a lot of time and all of the hassle by ensuring reports are done accurately and are submitted on time.
A BAS agent can gather all the receipts and invoices, prepare your BAS and lodge it with the ATO, and liaise with the ATO on your behalf in regard to any disputes or correspondence.
Because of their expertise, having a qualified bookkeeper doing your BAS also gives you peace of mind because if anything goes wrong, they have Professional Indemnity Insurance of at least $250K. In addition, if your bookkeeper fails to take reasonable care, fails to lodge on time, or makes any false or misleading statements, you are protected under Tax Practitioners’ Board laws.
Instead of you struggling to keep up with documentation and legal obligations, a bookkeeper can be of enormous benefit to both you and your business. They not only take a large burden from you by ensuring your business is in compliance with its legal requirements, but also enable you to view the health of your business with much more clarity so you can make early decisions on how you can improve it.