We all know that running a business takes a lot of our energies away. We concentrate so much on the end-product that all the rest does not really matter.
Let me tell you some very common mistakes business owners make:
You start your business and are excited about your first sale (yey!), and you are convinced that sale is making you $xxxxxx, so who cares about keeping it all straight! The more you sell the more you make, right? Then, the end of the financial year approaches, you need to tidy up your books, and you do not know where and how to start. You panic, and eventually, contact a professional. TA-DAAAAA! Before you know you are going to regret it so much. The amount of time that person is going to spend tiding up your ‘mess’ is not for free. Keeping your books could be very easy and straightforward, but it must be done as you go.
From the moment you start your business, you should have accounting software in place (QuickBooks, XERO, MYOB, SAASU, Reckon, they all do the same job) or even just an Excel Spreadsheet to get you started. Do not keep flying receipts (that fade away) in a drawer that never gets opened, take a picture and save it somewhere, and depending on the software you purchased, you might even be able to store the image there. Find someone to help you set up those accounts. Many do not know the difference between motor vehicle expense & motor vehicle at cost. Do you? If not, start looking for help now. The last thing you wish for is ending up with bad records and a call from the ATO asking: How do you justify this expense?
And, very important, if you only use one bank account, make sure you clearly divide personal expenses to businesses expenses, because, yeah, that is fraud!
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