Business owners know how quickly losing track of their financial records can snowball. One moment, you’re a couple of invoices behind – the next, your cash flow is a mess, and you’re at a total loss for where to start.
No matter how hard you try to be strict in all details, hang onto all your receipts and keep records, you still find it difficult to handle your bookkeeping duties.
Small business bookkeeping can be such a tedious and mundane task – little wonder that so many business owners will try to avoid it as much as possible.
Since it has to do with your finances however, everything related to your business’s performance depends on how well you keep track of your bookkeeping from cash flow, to your sales, all the way down to your smallest expense.
Luckily, a bookkeeper in Melbourne not only helps you get back on your financial track but also protects you from these common bookkeeping mistakes…
5 common bookkeeping mistakes to avoid
Sustaining a business can be very challenging for most business owners. You’ve got so many day-to-day demands splitting your attention from operations, marketing, sales and even customer service.
And that’s on top of all of the major and minor decisions and headaches that only the business owner can face.
In particular, all the work that goes into keeping an eye on financial matters may be missed in the process ending up in penalties, debts, and other unpaid responsibilities.
Most of these stresses are rooted in these common mistakes that business owners can avoid if they bring in professional and reliable bookkeeping in Melbourne!
Problem 1: mixing personal and business spending
This is an especially common issue with startups and self-employed businesses!
While it works in a pinch, most of the time it’s more trouble than it’s worth. All of a sudden, you’re on the hook for business debts – not to mention, it makes it harder to do your bookkeeping if you can’t remember what’s a personal expense, and what’s a business one.
Problem 2: poor record keeping (or not having any at all)
To understand where your business is at financially, you need to keep track of where your money goes and how it is spent.
And that all depends on how well you’re able to keep records.
Poor record-keeping is one of the most common mistakes that business owners make – one that often leaves them not knowing where their sales went and how many of their debts were left unpaid.
Record keeping is an essential task that businesses will need to do in the long run.
Keeping receipts and recording them in an organised file system will help you assess your expenses and keep track of your financial status.
All of this will provide you with the necessary information needed for you to make important financial decisions. And in the event that you need to be audited, you have accurate financial records to present.
Problem 3: no backups of financial data
You’ve got a fire escape plan. You know what to do if someone has a medical emergency while at your business.
But what if you lose the only copies of your financial records and data?
Like we said before, financial data is the key to good decision-making and planning. Lose these records, and you’re going to have a tough time moving your business forward.
Our advice? Start by avoiding paper copies – we all know how easy it is for an important invoice to accidentally end up in the recycling bin.
And if possible, go digital – specifically, go with cloud bookkeeping!
Not only does it eliminate the need for easy-to-lose paper copies, but it’s also automatically backed up at a remote location, meaning even if your computer fries itself or is stolen, your records will still be safe and secure.
- Real-time monitoring
- Fast and easy collaboration
- Automated reports and invoicing
- Accessible data management and accurate forecasting
Problem 4: doing it all manually
Time and money are two of the most important assets that any business owner has.
When business owners try to do their bookkeeping manually, they can waste both of these precious resources – money owing to mistakes, and time as they struggle with all the tedious and time-consuming grunt work of bookkeeping.
While a hand calculator and a spreadsheet can get the job done, they’re slow, with a capital S.
Speed things up by going digital – Excel can make things significantly faster by crunching the numbers for you.
And once again, you can speed things up even further by taking your bookkeeping into the cloud.
In addition to providing off-site backups, cloud bookkeeping also automates large parts of your bookkeeping.
We briefly mentioned how cloud bookkeeping automatically crunches the numbers, generates reports and invoices. However, that isn’t all it does – it also:
- Syncs with your bank account, POS system and more, eliminating data entry
- Automatically corrects mistakes using bank records
- Calculates tax payable
- Comes with plugins and addons (like automatic travel expense calculation) that automate your bookkeeping even further
Mistake 5: not hiring a bookkeeper
Take our word for it, this is the big one!
We get it, really – as a business owner, the buck stops with you. It’s your responsibility to make the big decisions, to keep everything running and intervene.
It’s an admirable trait – unfortunately, it’s also one that people take into managing their business accounts and finances.
This may work for some time, but we know how busy business owners can be and how easy it is for things to slip through the cracks. Now, combine that with the possibility that you aren’t great with crunching numbers and it’s clear to see why this is such a bad idea.
Luckily, it’s one that you don’t need to worry about if you engage a professional bookkeeper in Melbourne to do all of this stuff for you!
How a bookkeeper in Melbourne helps you avoid common bookkeeping mistakes
Outsourcing bookkeeping services in Melbourne guarantees quality bookkeeping solutions that you need for your business. On top of helping you avoid each of the mistakes we just ran through, a bookkeeper in Melbourne can also:
Save on overhead cost
What’s cheaper: hiring your own in-house bookkeeper and paying full-time wages with benefits and leave, or engaging an external bookkeeper and only paying their fee?
Not only does it reduce expenses, but it also saves you from space and office costs like new computers – not to mention, most small and medium businesses simply don’t generate enough transactions to justify a dedicated bookkeeper!
Provide various bookkeeping services
Outsourced bookkeeping services don’t just look after your bookkeeping – they provide various bookkeeping solutions for your business.
From the simple to sophisticated and advanced bookkeeping solutions, to online bookkeeping solutions, our team will help you deal with all of your business’ financial and record-keeping requirements.
Get help from an expert
We’re trained, experienced and we have the tools and programs needed to ensure that all of your finances are in good order.
In short, we’re much better placed to look after this stuff than anyone else on your team!
Our bookkeepers in Melbourne have a wealth of experience in a range of different areas, ranging from taxes, to debt collection, to day-to-day number crunching, our bookkeepers can give you a higher level of service.
We can set you up with advanced cloud bookkeeping tools
We’ve spent quite a lot of time talking about the benefits of cloud bookkeeping – what we didn’t get to go into detail about is how our bookkeepers can help you get set up with a tailored cloud bookkeeping solution.
While it’s possible to get started on your own, if you want to get the most out of it, it’s crucial that you:
- Migrate your current records over
- Understand how the system works
- Sync your system with your other accounts and programs
You might be able to figure all of this out yourself… but do you really have the time for all of that?
As Xero, MYOB and QuickBooks specialists, our cloud bookkeepers in Melbourne ensure that your transition to the cloud is as smooth and seamless as possible.
Avoid these common mistakes with the help of a bookkeeper in Melbourne!
When it comes to bookkeeping, you can’t afford mistakes.
Luckily, that’s something that we can help you with.
Our team of expert bookkeepers in Melbourne offer bookkeeping services in Melbourne specifically tailored for the needs of small and medium businesses like yours:
- Payroll solutions
- Debt collection
- Balance sheets
- Cloud software implementation