Talking Cents

4 Accounting and Bookkeeping Mistakes Small Businesses Often Make

Small businesses face the risk of making inexpensive yet simple blunders if they don't have access to a professional small business accountant in Sydney.

From setting up accounting systems to keeping track of expenses, bookkeeping is integral to any business. While many small business owners believe that accounting is a reasonably straightforward procedure, they end up not giving it the proper attention that it requires.

Here are a few blunders that business owners who attempt their own bookkeeping frequently make but may easily avoid, according to our team of M.A.S. Partners.

1. Miscalculating G.S.T.

We, as business accountants, have frequently witnessed small businesses misinterpreting G.S.T. rules. They either forget to register for G.S.T, fail to provide clients with valid sales receipts or fail to set aside a tiny amount of revenue to cover their G.S.T. obligations.

When you work with a reliable accounting firm, you won't ever have to worry about G.S.T obligations again.

2. Failing to carry out simple account reconciliation

If you're a small business owner, it's important to make sure your finances are accurate and up-to-date.

A vital task is to match the accounts books to the most recent bank statement. To assess your financial situation, make sure it is done each month. Additionally, it's crucial that you perform it correctly and consistently.

Account reconciliation is a straightforward process. And it enables you to find any mistakes made by the bank before they cause significant problems for your financial strategy. Failing to address any bookkeeping errors along with reconciling the accounts can result in a significant financial problem.

3. Failing to categorise income and expenses

To increase revenue, categorisation is one of the most crucial reasons to do so. You won't be able to see the true profit until you know how much you make next to how much is spent.

A business must track its income and expenses in order to determine its profitability. If a business is not tracking its income and expenses, it may not be able to accurately calculate its losses or profits. This can lead to incorrect financial reporting, which could affect a company's stock price and funding options.

4. Doing all by yourself

Doing one's own bookkeeping can be challenging and time-consuming for a small business owner without accounting skills. Even though you might get the urge to save money by focusing on bookkeeping all by yourself, making the mistake of attempting to manage your accounts on your own will cost you more money and time.

In an effort to keep costs down, many small firms try D.I.Y. accounting when they first get started, but this can actually hinder their expansion and jeopardise their financial stability.

Hiring a competent and licensed business accountant helps business owners, at a basic level, avoid costly accounting errors and saves them a tremendous amount of time, allowing them to concentrate on expanding their firm.

Consider Small Business Accountants at M.A.S. Partners

A top-notch business accountant in Sydney brings market expertise to the table and can assist business owners in making compelling arguments to potential investors, which will speed up the organisation's growth even more. For more information about our small business accounting services, click here.