As you experience small business growth, some seemingly unimportant processes will over time become more complicated.
At the top of this list is bookkeeping and accounting. Larger numbers and higher volume in purchasing and employment means more complicated math and more finances to keep track of. Even if you outsource and hire an accountant to help you with the data management, it is still very important to double-check his or her work, just in case items have been incorrectly allocated as sometimes things can be interpreted incorrectly to what the business owner does.
Here are some common errors that small businesses make when it comes to accounting and bookkeeping.
If you’re an entrepreneur this may seem simple but you always need a reminder and we know you know what receivables are — it’s recorded when a customer owes you money for your business’s product. Make sure all of your customers have paid you in full. Go through your list of receivables and double-check that you don’t have customers whose balance is outstanding and if they are you need to ensure you put processes in place for collections or possibly seek to outsource this process, as it’s a very repetitive task.
Expense receipts are very important for tax returns, as well as monitoring cash flow. Especially for small businesses with more employees, it can get difficult to keep track of everybody’s expenses —Keeping receipts also will help you better monitor your bank account to ensure that there is no fraud. There are many resources out there that you can snap a picture of the receipt and automatically save this to your cloud account. At the bare minimum you can setup a free dropbox.com account, download the free app and upload receipts automatically.
Accounting is one of those tasks that are better left to someone who does it for a living. Entrepreneurs and established business owners already have enough going on day to day, without having to worry about expenses and receivables. Leave these tasks to a trusted Melbourne accountant, and save all your spirit for planning and improving your business.
It’s important to keep an open dialogue with your Melbourne accountant. Financial jargon can be difficult for people to understand, especially people who are not in the field of finance. Make sure you understand everything and ask repetitive questions until you get the answers you need, and ensure that you understand the numbers involved because your paying for good advice.
This is especially crucial for the long run, as your small business’s finances can get more and more complex as time goes on and proper planning now can save days or weeks of putting out brush fires down the track when you really should be toasting your success.