The Truth Behind Successful DIY Bookkeeping
For the owners of a small business, time is of the essence. Flying solo or with a small team, business owners need to cover many bases. One of those bases is financial record keeping or small business bookkeeping. If your accounting and bookkeeping records are current and accurate, chances are your business will be successful. However, if you fail to prioritise your accounting chores, your business may sink without you being aware it’s even happening.
Accounting & Bookkeeping Myths
- Bookkeeping takes up too much time
- DIY Bookkeeping software is expensive
- Less time to focus on your business
- Uncertainty about the treatment of paid & unpaid invoices
- You’ll miss something important
- GST is confusing
- You still need someone to lodge your BAS
In the past, small business owners had no choice but to outsource even their simplest administrative tasks to expensive bookkeepers or bookkeeping firms. Everything they heard reminded them that bookkeeping is complex and should be undertaken by professional bookkeepers.
Today that is not necessarily the case. There are quite a few software packages offering bookkeeping services that remove many of the pain points in bookkeeping. This technology has delivered innovative bookkeeping solutions that have made DIY bookkeeping easier.
Despite that development, there are still many out there that insist that accounting for small businesses is best managed by an external bookkeeping business. Let’s dispel some of those common misunderstandings.
Bookkeeping takes up too much time
Its accurate small business bookkeeping can be a little tedious at times. But only if you are approaching it in a haphazard or disorganised manner. If you throw all your receipts in a drawer or manage multiple spreadsheets to record expenses and sales, then at some stage, sorting it out will be very tedious. Similarly, if you are sending invoices that are late and can’t be tracked or wasting time in making phone calls to chase overdue payments, that can make your business bookkeeping very tiresome.
So all you need is a little discipline, some organisation and the right technological tools, and you can completely overhaul your DIY accounting processes. It is not difficult to record sales, issue invoices, chase late payments and track GST. It can all be sorted in a matter of minutes. DIY bookkeeping can be quite enjoyable with the right tools and systems in place.
DIY bookkeeping software is expensive
Many accounting software packages, designed for accountants, are complex and sometimes incomprehensible for a small business owner. But there are more sophisticated solutions now that offer a simple user interface specifically designed to provide accounting and bookkeeping services for small business. Many are affordable. If you factor in the time saved doing repetitive business bookkeeping tasks, they may save you much more than they cost. And you don’t need a degree in accounting concepts or IT to do your bookkeeping yourself. Ready-made bookkeeping solutions can help you break free from the hassle of complex setups and binding contracts.
Less time to focus on your business
Doing your own bookkeeping will improve your understanding of your business and help you stay on top of emerging issues. You will know what is going on. You will be aware of what’s due in and which of your debtors is falling behind at every stage. If you know early that a debtor is falling behind, you may not wish to extend further credit. Your focus on business is more informed. Further, it will track your GST as you go. DIY bookkeeping services can lead to a healthier cash flow and may provide even more time to grow your business.
Uncertainty about the treatment of paid and unpaid invoices
Whether an invoice is paid or non-paid, it is GST relevant, so it must be recorded. A smart invoicing solution will handle all your complex issues such as part payments or one payment covering several invoices. You can easily manage complex invoice management issues if you have the right tools.
Read more about the invoice lifecycle and improve on your internal processes!
You’ll miss something important
You’re more likely to miss entering an expense if you are in the habit of chucking everything into that drawer before handing it over to your bookkeeping company. Recording all bookkeeping and accounts entries as you go will enable you to stay on track and not have to try to remember what may have happened at a time in the past. Invoice your clients as the sale happens, record your receipts as they occur and stay on track all the time, and you will not miss a thing. And tax time will never be as stressful again.
GST is confusing
It’s actually pretty straightforward. As a business, just about every transaction you do will require you to add 10% GST. Exceptions are rare unless you’re a charity and then your donations are GST free, or you sell basic foods that are GST exempt.
You still need someone to lodge your BAS
You can do your BAS statement yourself. It’s not complicated. Simply make sure you record your income and expenses as you go. Don’t let the receipts pile up. Link your payroll with an application that automatically feeds into your BAS return. Adopt a system that helps you with all your complex invoicing matters, helps you track GST and lodge BAS.
DIY bookkeeping can be a game-changer for small business
There are many bookkeeping services for small business. They will tell you that using their accounting and bookkeeping services will assist your business. But hiring expensive bookkeepers need not be the only option for all business owners. Sophisticated and affordable technology has enabled business owners to manage their everyday accounting tasks and run their business efficiently. More importantly, it often helps business owners better understand and develop their business.