The truth behind successful DIY bookkeeping
For the owners of a micro or small business, time is of the essence. Flying solo or with a small team, business owners need to run faster than time.
Due to the lack of options previously available, business owners had no choice but to resort to outsourcing even the simplest of their administrative tasks to expensive bookkeepers. They were also led to believe that bookkeeping is complex and should be left to professionals.
Thankfully this doesn’t hold true any more. Technology has brought us smart solutions that have taken DIY bookkeeping to a different level.
It’s time to dispel some common myths attached to DIY bookkeeping and get clever about managing your business your way.
Myth#1 Bookkeeping is tedious and takes up too much time.
Yes it can be, but only if you are jamming receipts into a shoebox, managing multiple spreadsheets to record expenses and sales, sending invoices that are late and can’t be tracked, and wasting time in making phone calls to chase overdue payments over.
With the help of right technological tools you can completely change the way you manage everyday bookkeeping tasks like recording sales, issuing invoices, chasing late payments and tracking GST. This can all be sorted in a matter of minutes. DIY bookkeeping is not tedious. In fact it can be quite enjoyable with the right tools and systems in place.
Myth#2 If you want to do it yourself you will need to install expensive software and pay steep licensing fees.
Many accounting software packages, designed for accountants, are complex and sometimes incomprehensible for a small business owner. But there are more sophisticated solutions now on offer which offer a simple user interface so you don’t need a degree in accounting concepts or IT to do your bookkeeping yourself. They will help you break free from the hassle of complex setups and binding contracts.
Myth#3 You will have less time to focus on your business.
Wrong! In fact doing your own bookkeeping will help you stay in charge of your business. You can be on top of paying what’s owed and collecting what’s due. Track your GST as you go. Improved control over your invoicing (paid or unpaid) leads to healthier cash flow and not to mention more time to grow your business in the right direction.
Myth#4 You will not know how to handle payments versus non-payment of invoices.
In simple terms, whether an invoice is paid or non-paid, it is GST relevant so it needs to be recorded. A smart invoicing solution will handle all your complex invoicing issues such as part-payments or one payment covering several invoices. Managing invoicing isn’t black magic - you can handle it and in fact manage it like a pro given you have the right tools.
Myth#5 You’ll miss something important.
You’re more likely to miss entering an expense if you are in the habit of chucking everything in a shoebox and handing them over to your bookkeeper. Instead, record them as you go, invoice your clients as the sale happens and stay on track all the time. Tax time will never be stressful ever again.
Myth#6 GST is tricky business.
As a business, just about every transaction you ever do will require you to add 10% GST. Exceptions are rare unless you’re a charity and donations you receive are GST free, or you sell basic foods which are GST exempt. Ask your bookkeeper once if you have GST exempt sales, not every quarter!
Myth#7 You'll still need someone to lodge your BAS.
The truth is you can do it yourself and very effectively so. 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.
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 themselves and run their business efficiently.
If you are new to DIY bookkeeping and not sure what suits you and your business, Reach Accounting is an online application that makes invoices & BAS easy for small business owners.
Written by Giles Donovan, CEO Reach Accounting.
Reach Accounting is an online application that makes invoices & BAS easy for small business owners.