Common Bookkeeping Mistakes to Avoid
Posted 9 Apr
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Posted 9 Apr
Let’s face it; bookkeeping isn’t the most exciting part of running a business. However, it’s one of the most important! Keeping your financial records in check not only helps you stay on top of your business but moreover ensures you're meeting Australian Taxation Office (ATO) requirements without stress or penalties.
With the ATO using real-time data to cross-check reports, it’s never been more crucial to get your bookkeeping right. This is especially true for small to medium-sized business owners who are managing their own finances.
Let’s go over some of the most common bookkeeping mistakes and, more importantly, how to avoid them so you can keep your business running smoothly!
1. Not Keeping Accurate Financial Records
Trying to track your finances with spreadsheets (or worse, nothing at all!) can lead to chaos. Investing in accounting software like Xero makes managing your books easier, saves time, and reduces errors. Further, being able to have a financial overview over your business to catch any blow outs early is crucial. However, to be able to do that you need to have your books in order first. Think of it as your financial safety net!
2. Missing ATO Deadlines
We get it; business life is busy! But missing BAS, superannuation payments for your employees and tax return deadlines can lead to hefty fines and unnecessary stress. We can’t do it all by ourselves so having a trusted team of bookkeeper and accountants by your side to ensure your file is ready when needed is crucial.
3. Mixing Business and Personal Finances
It might seem convenient to use the same account for everything, but this can lead to confusion and errors when it’s tax time. Keeping your business and personal finances separate makes life (and tax time) so much easier.
4. Incorrect GST Coding
Accidentally over-claiming or under-claiming GST is a common mistake that can cost you. Double-check your transactions or get a professional to review them so you’re not leaving money on the table or paying more than you should.
5. Ignoring Payroll and Superannuation Obligations
With Single Touch Payroll (STP) reporting in real time, there’s no room for mistakes. Late or incorrect super payments can result in penalties, and you won’t be able to claim them as a tax deduction. Stay on top of payroll and super obligations to keep your team (and the ATO) happy.
6. Not Seeking Professional Help
Running a business is already a full-time job. So, why add bookkeeping stress on top? A bookkeeper can either train you to handle things correctly or take the burden off your shoulders completely, so you can focus on what you do best.
Bookkeeping mistakes happen, but they don’t have to! With the right tools, habits, and support, you can keep your finances in order and avoid costly errors.
At Empire Accountants and Empire Bookkeeping, we’re here to help you navigate the numbers with confidence. Whether you need a quick check-up or full bookkeeping support, we’ve got your back.
Feeling overwhelmed by bookkeeping? Let us take the stress out of it for you! Whether you need a Xero review or ongoing bookkeeping support, our friendly team at Empire Accountants and Empire Bookkeeping is ready to help.
Get in touch today and let’s get your books in order!
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