5 Reasons why you should engage a professional bookkeeper

When it comes to evaluating the inflow and outflow of cash within a small business, DIY bookkeeping seems to be an ideal option. However, if you’re not good with numbers or accounting is not your forte then, you may end up making a mess of the books and increasing your tax burden by making technical errors.

This is exactly why bookkeeping companies and professional bookkeepers are here; to assist small and medium business owners in maintaining the books in a stress free manner while claiming all possible tax deductions to help make your business venture grow. Let’s take a look at the top 5 reason why you should engage a professional bookkeeper.

They know how accounting software works

Most of the times, DIY bookkeepers are not fully aware of the basic principles of accounting and how the accounting software exactly works. This is the number one reason behind inaccuracies leading to penalties for underpayment of taxes by the ATO. Professional bookkeepers from renowned firms are well versed in the subject of accounting and know all about the intricacies of the accounting software being used.

Professional bookkeepers are also well aware of what records are required to be entered into the system and which ones aren’t. By hiring a professional bookkeeper from a recognized bookkeeping firm right from the start, you will be able to cut down on the costs incurred during the end of the year when you will have to pay much more in order to have your books corrected and avoid any tax liabilities.

They comply with PAYG (Pay As You Go) deadlines

Another major mistake that most small business owners make when handling their own books is failure to lodge their BAS statement and PAYG on time. This mistake usually leads to bigger problems such as leading to a failure to lodge (FTL) penalty. Having a qualified, highly skilled bookkeeper onboard will not only keep proper records of all the business transactions so you can focus on other aspects of the business, but also lodge your forms to avoid missing deadlines.

Payment of correct employee Superannuation contributions

When you pay more than $450 to an employee in a calender month, minimum 9.5% super amount must be paid out of each employee’s salary earnings base. With effect from July 2008, the earnings base is ordinary time earnings. Failure to comply with Australian superannuation laws and superannuation obligations may result in heavy fines and penalties levied on such defaulters by the Australian Tax Office.

When you hire professional bookkeepers, who are registered BAS agents, you will never have to worry about making incorrect super contribution payments because they are fully aware of the current superannuation laws.

They prepare correct invoices

Perhaps the most fatal mistake that DIY bookkeepers make is incorrect invoicing that later leads to bigger problems at the end of the financial year. On the other hand, some business owners wait for months before sending out their invoices and so creating problems with the cash-flows. Over time, invoicing incorrectly can inhibit the overall performance of the business particularly when the invoice cannot be reconciled with the items sold.

In order to make sure that your books are kept up to date, hiring a bookkeeping company is the ideal option. Highly skilled bookkeepers are not only efficient in invoicing correctly but they can also identify overdue debtors and chase them for you. All you have to do is focus on how to make your business venture grow while the bookkeeper takes care of all things accounts related.

They know correct GST and tax deductions

Due to lack a of knowledge regarding basic accounting principles and tax laws in Australia, many DIY bookkeepers wrongly record certain items as tax deductible. For instance, claiming for a full tax deduction on a motor vehicle that is partially used for personal use or the supplier is not registered for GST and yet a GST deduction is claimed.

Professional bookkeepers have years of experience and knowledge which is why they know exactly where to code depending on the nature of the business.

These are top five reasons why engaging bookkeeping services is essential for all businesses regardless of their size and structure to ensure smooth running and potential growth..