Our Melbourne bookkeepers reveal 6 common bookkeeping mistakes
August 13, 2019
Bookkeeping is the lifeblood of any business, big or small.
This isn’t our bias talking, either – in our experience as a team of Melbourne bookkeepers, we’ve helped many businesses climb out of the financial holes they’ve dug themselves into.
And over time, we’ve noticed many small business owners making the same mistakes.
It’s important to us that our clients have all the tools and information they need to make the best bookkeeping and business decisions.
That’s why we’ve put together a list of the most common recurring mistakes, how they affect your bookkeeping and what you can do to avoid them!
5 tips from our bookkeepers in Melbourne
1) NOT using cloud bookkeeping software
In our information-reliant, it constantly surprises us how many of our clients still aren’t using online bookkeeping software, and who are still trucking on with manual bookkeeping.
There are so many benefits to transitioning to the cloud!
Cloud bookkeeping is a great way to ensure you’re always on top of things. With the cloud powering your bookkeeping, you will be able to:
- Access information from wherever you are
- Enjoy to-the-minute records
- Automate much of the busywork
- Cut data entry out of your day
- Collaborate in real-time with your bookkeeper in Melbourne
We know how time-consuming manual bookkeeping can be.
Our Melbourne bookkeepers remember a time before cloud bookkeeping: we remember how much work was involved – which is why we jumped aboard the cloud bookkeeping train so early!
Manage your own books? Just think about how much time you’ll get back when you use cloud software. What’s more, think about how you’ll never have to worry about data entry or calculation errors again.
You aren’t stuck with just one option for online bookkeeping, either – there are many different programs available that you are bound to find one that is just right for you!
2) Mixing personal and business expenses
Almost every client we’ve ever helped has at some point struggled with expenses.
And unfortunately, many of them end up paying for business expenses out of their personal accounts to keep the lights on.
SImply put, it just makes things confusing from a bookkeeping and accounting perspective. In particular, it muddies the waters at tax time, when you should be claiming those expenses back.
That’s why we suggest you set up a system for tracking your expenses, as well as a separate bank accounts for your business expenses.
That way all your expenses are in the one spot and you can keep a closer eye on them.
3) Not tracking your cash flow
Many small business owners in particular make the mistake of conflating revenue with cash flow. These are completely different!
You may be earning a lot of revenue – but how much of it is in cash, which you can spend right now to pay bills and wages?
Say you make a big sale worth $10,000 – great! The problem is it’s in credit, and your quarterly energy bill is due in 3 days. While you have earned revenue, unless the payment itself comes through very soon, you won’t be able to keep the lights on.
Our Melbourne bookkeepers see this kind of thing happening all the time, which can often lead to business decisions being made with faulty information.
Our advice? Learn the difference, and set up a system that tracks cash flow specifically.
4) Messing up GST
This is a big error that our bookkeepers in Melbourne see businesses making all the time.
We aren’t talking about forgetting to charge GST – what we’re talking about is forgetting to report it.
Businesses that turn over more than $75,000 a year must register as a GST-registered business. As part of that, you’ll need to compile a business activity statement (BAS) that reports:
- GST collected
- GST credits
- Fuel credits
- PAYG installments
- Other taxes
The problem is that many newer businesses simply forget, and find themselves in hot water with the ATO as a result. Not to mention, they’ll also miss out on many of the benefits, such as GST credits and other credits.
In other cases, business owners may forget to deregister when their business turnover falls below the threshold for mandatory registration, change structure or close.
5) Leaving your bookkeeping until the last minute
Our bookkeepers in Melbourne can’t stress to you enough how important it is that you don’t leave everything until the last possible moment!
Staying on top of your bookkeeping throughout the year can make tax time considerably easier for you. When the end of the financial year rolls around you will have a lot less stress on your plate because everything will already be sorted out as it should be.
Not to mention, you also get to skip the headache that comes with playing catch-up!
And while we’re on the topic of doing your own taxes…
6) Doing your own bookkeeping
You’re a busy person. As a small business owner, you work longer hours than most, and have to be the “fixer” for just about everything.
That’s a lot of work to put on one person – why add to it?
Get some of your time back by leaving your bookkeeping to the professionals. Our bookkeepers in Melbourne can take all the legwork off your plate, allowing you to spend time actually running your business!
We can save you even more time by helping your business transition to time-saving cloud bookkeeping.
Not to mention, we’ll also help you avoid simple errors or mistakes if you aren’t really a maths whiz!
Hire the best Melbourne bookkeepers to make sure no mistakes are made!
If you’re looking for a team of Melbourne bookkeepers who are not only experienced but passionate about what they do, look no further.
Maximum Business Solutions is the Melbourne bookkeeping service for you!
We take all the worry, headaches and stress away to make bookkeeping simple and fast. Our mission is to make your business bookkeeping simple, quick and error-free.
We provide a range of services to our customers:
- Payroll
- Superannuation
- Reconciliation
- Invoicing
- Reporting
Whether you need somebody to clean up your accounts or regular, ongoing bookkeeping in Melbourne, you need the Maximum Business Solutions team on your side.
If you want to get in contact with us we would love to hear from you. Give us a call on (03) 9589 0128, or fill in this form and we’ll be in touch..
