Why DIY Bookkeeping Is Risky & Dangerous

Big organisations usually have their internal accounts; however, small businesses, to save money, tend to do bookkeeping themselves. One thing they do not consider is the danger they are doing to themselves. The rule is simple and quite obvious: if you are not trained, you will harm your business.

Poor accounting knowledge will penalise you if you are keeping your own books. Accounting software can help you keep all receipts and invoices tidy, however, without a solid knowledge under your belt, it is all very futile. You don’t want to send the ATO some misleading and false documents, the consequences would not be worth the risk. A certified bookkeeper is educated and trained not only to do the calculation and categorise transactions but they are also trained to use all features of accounting software and avoid silly mistakes.

Another major reason why you wouldn’t want to DIY bookkeeping is the risk of not meeting ATO deadlines. Lodging your BAS and paying your liabilities on time is vital for a business of any size. Payroll, superannuation payments and other obligations are extremely important too. In Australia, we have different categories of visas and they all mean different tax rates to be applied. How do you which one is which? You need training, good, well training. A qualified bookkeeper and BAS agent must constantly train themselves, so rest assured you are in safe hands when it comes to laws change or other ATO-related changes.

Payables and receivables are everyday tasks that if not looked after, serious problems will arise. Can you imagine if you are accounting for more money than you received? Or if you are not claiming things you could be claiming? In each case, that is bad. Very often these are genuine mistakes, business owners simply do not have the time to do it all properly, or do not have the knowledge to deal with it. A professional and qualified bookkeeper can look after your payables and receivables and you can keep running your business (which is what you do best!).

Another big issue of DIY bookkeeping is claiming for deductions you shouldn’t be claiming. The ATO is very strict with that, and they do whatever it takes to find out the truth. Claiming a GST item that is partially used for private use could cause you serious trouble and big fines.

Financial statements such as Profit & Loss and Balance Sheet are vital for the business. You must know your numbers, but how can you do that if the information on the reports is false? A professional bookkeeper will generate accurate reports for you and will be able to spot mistakes at a glance.

A full time bookkeeper can cost be quite expensive, and most likely you won’t need someone doing it full-time. That is why outsourcing is a great idea. Before outsourcing a bookkeeper do your researches; look at their reviews and evaluate their prices. Cheap doesn’t always mean good. To do a good job we need time (and knowledge of course!). See what’s around, evaluate and then decide.

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