In business, we like to think we can do everything.
But as a business grows, smart business owners soon realise that to manage their time better. They must outsource non core business functions like bookkeeping. But many businesses, still try to do everything themselves and so we’ve come up with 7 traps you must look for for do-it-yourself bookkeeping.
1. Doing it yourself, makes it hard to monitor cash flow.
A business under financial pressure needs to monitor its cash flow carefully. A dedicated bookkeeper does this by keeping records up to date with regular reporting rather than updating the books at the end of each quarter.
2. Accounting software is not as easy to use as you think.
Whilst some Accounting software is user friendly, there are some traps for businesses that don’t know how to use the software properly. You need to know what records need to be entered and where to enter them. Only bookkeepers with experience in using accounting software can provide access to accurate financial records that represent the real picture. This ensures you won’t have any nasty surprises from the ATO.
3. You must keep on top of your BAS, GST, PAYG and Superannuation obligations.
Every quarter, your business needs to lodge a BAS statement and pay GST, PAYG and Superannuation. Missing deadlines for any of these can result in penalties. You must have up to date records will give you peace of mind.
By outsourcing your bookkeeping, these deadlines become straight forward as they are managed by someone focussed on keeping your books up-to-date.
4. Don’t lose track of your accounts payable.
Accounts go unpaid for a variety of reasons. In most cases, it’s because you’ve lost track of what you have and haven’t paid. A bookkeeper will put the systems in place so you don’t have unpaid accounts hanging over your cash flow and potentially damaging the reputation of your business.
5. Incorrect recording can be a problem.
Incorrect recording occurs when a business owner is unsure where to record the item. So they just choose from whatever ‘sounds right’ rather than ensuring all items are recorded correctly. Having a bookkeeper experienced in the Real Estate industry means they know which items go where.
6. All bookkeepers are not the same
A good bookkeeper gets things done on time, accurately, which produces clear reporting and accounting benefits to your business. Poor bookkeeping hinders the accuracy of your financial reporting and may result in nasty surprises and headaches for you the business owner.
7. Don’t fall for the “I can do it cheaper” trap
A common mistake by many business owners is not realising the REAL cost of employment. Employing staff is often more expensive than outsourcing as you must also factor in costs such as: costs to advertise a position, your time to interview candidates, cost of training and then the additional employment costs such as workers comp, payroll tax, sick and holiday leave and superannuation. With outsourcing you don’t need to worry about these additional costs.
Whilst DIY bookkeeping can seem like the cheapest alternative, you’ll soon realise that you are better off outsourcing this non-core function. It will give you the time and freedom to do what you do best, grow your real estate business.