While maintaining books and performing basic accounting for small businesses may not require the expertise of a Melbourne Accountant, some mistakes prove to be very costly. In fact, a lot of businesses adversely suffered from lack of financial foresight and paid penalties due to faulty and erroneous accounting practices.
So while one might think foregoing the need for a Melbourne accountant is a great way to cut down on overhead costs, it could potentially lead to bigger expenses or worse, out your business at serious risk.
Here are some mistakes you will want to avoid with a Melbourne accountant or a bookkeeper that could potentially place your company on a shaky ground:
Not Updating Receivables
Getting paid is one of the exciting aspects of running a business. However, a lot of business owners fail to stay on top of their receivables. Upon issuance of invoice, every receivable should be properly recorded – meaning a client or customer owes you money.
By keeping your receivables updated with the help of your bookkeeper or Melbourne accountant, you will have a clearer picture of all outstanding balances and money owed to you. Receipt of payment should also be promptly marked as paid.
Failing to do so can lead to hours poring on receivable listings and can potentially lead to overpayment of taxes and of course, higher bad debts.
Not Keeping Expense Receipts
It may come as a surprise, but a lot of business owners fail to keep copies of their expense receipts. This will of course lead to bigger headaches for your Melbourne accountant and trigger a series of cash flow, accounting and tax problems.
How many times have you gone over your bank account and don’t have a clue where the $100 was spent on? Not keeping actual receipts can lead to incorrect and incomplete tax reporting and higher taxes especially if you will be audited.