It surprises me how often a business owner will opt out for price over quality when engaging people to look after their business transactions. Engaging unqualified and inexperienced people mean you could end up paying a higher fee for someone else to come in and fix their mistakes.
Even worse still, is that you aren’t aware they have been making errors as most business owners wouldn’t know where to begin to check on their bookkeepers work.
As A BAS Agent/contract bookkeeper I have found some of these I have listed are the most common bookkeeping mistakes made:
1. Failing to account for GST correctly
I find that this generally applies to GST on insurance, telephone and motor vehicle registration bills where there are parts of the invoice values that have GST and others that don’t. This means that it is entered incorrectly onto your BAS statement claiming incorrect GST credits.
2. Ineffective reconciling
All your bank accounts need to be on a regular basis reconciled to ensure that your financials are correct. Is your bookkeeper reconciling on at least a monthly basis? Personally I reconcile on a daily basis to ensure that all my figures are correct to the day and if there are any anomalies they can be rectified immediately.
3. Payroll and Superannuation
I have found that some bookkeepers don’t know how to set up the superannuation and entitlement calculations accurately in the accounting software. One common mistake is superannuation being paid on everything except just on ordinarily earnings costing the business thousands of dollars because of that one very expensive error.
4. Duplication
I have found duplicated bills which resulted in double payment, lists of credits owed to the business that hadn’t been applied. These mistakes wouldn’t have happened if they reconciled at least monthly their supplier statements.
5. Monitoring your Cash flow
As a business owner you need to have up to date information on your current position so you are able to plan for contingencies and develop your business. A professional bookkeeper will regularly update your bank/credit reconciliations, your payment processing and invoicing to ensure that you have a clear picture of how your business is faring. If you decide to sell your business all the facts and figures are at your fingertips and can be easily presented to prospective buyers.
6. Not having a simple filing system
Did you know that record keeping is compulsory? By law you have to keep your financial records for seven years though receipts for large purchases should be kept indefinitely. You need to have a filing system that is easily accessed by you and your bookkeeper.
These are just a few of the common errors I see being made. Always engage the services of a qualified bookkeeper whose costs are tax deductible. By hiring a professional bookkeeper this frees up your time to focus on your business and know that your record keeping is up to date.
For ethical trustworthy bookkeeping solutions call Jaleana from Bookkeeping Fairy Perth on 0400 102 358. I am a registered BAS Agent 24806584 and certified bookkeeper with Cert IV in Financial Services and have over 14 years experience in MYOB and current experience on Xero.
Check out my website www.bookkeepingfairyperth.com.au or contact Jaleana 0400 102 358 for further information.