Statistics reveal that about half of all small businesses fail within the first 2-5 years. The main cause of business failure is poor financial planning and management. Accurate bookkeeping is essential to know how your business is operating and to be able to make informed decisions which affect the success of your business.

Some of the common mistakes business owners make are:

  1. Doing your own books – Some business owners think that doing their own bookkeeping is saving costs. However, is this as cost effective as you may think? If you don’t have the required basic accounting and tax knowledge, the cost to have your Accountant ‘fix’ the accounts later may in the long run cost you much more than employing a professional, qualified bookkeeper.
  1. Not reconciling accounts – One of the key elements of proper bookkeeping is to ensure that your accounts are reconciled against Bank statements regularly. Some business owners fail to do this or not complete this exercise fully each month which can lead to a misunderstanding of your true cash flow position.
  1. Incorrectly tracking expenses – Without formal knowledge of bookkeeping practices, it is likely that transactions may be coded to the wrong categories. Entering transactions to the correct category is vital for proper reporting and analysis of the business and GST purposes. A profit and loss report should also be reviewed on a monthly basis.
  1. Incorrectly recording GST – Many businesses don’t report the correct amount of GST on the BAS due to incorrect data entry and unfamiliarity with GST law. Oversight of this can lead to significant fines and penalties.
  1. Cash flow not effectively monitored– As part of the bookkeeping process and reconciling bank accounts, entering of supplier bills, customer invoices and payments should be regularly completed. This allows the business owner to be able to forecast their cash requirements. A professional, qualified bookkeeper can assist the business owner to manage the cash flow position and advise on further business growth.
  1. Invoicing/Debt collection – Business owners are sometimes too busy to invoice customers regularly and follow up customers for payment which in turn affects cash flow, which in turn reduces funds coming into the business and could stifle growth opportunities. A professional, qualified bookkeeper can assist in this process and set up an effective debt collection system to improve cash flow.
  1. Compliance obligations – Business owners are sometimes not aware of all the compliance obligations that they are required to meet. Using the services of a professional, qualified bookkeeper will give you peace of mind as they will keep your records up to date and lodge all forms on time, and avoid fines and penalties

And there are many more! If you need more time to focus on growing your business and make sure that your bookkeeping and financial obligations are being met, please contact Tony Lewis at Jaguar Bookkeeping on 08 8212 0217 or info@jaguargroup.com.au who will be happy to assist.

Latest News

  • 16 Oct 2016

    Jaguar Thank You Evening
    Read more »

  • 27 Sep 2016

    Discount to grow your business?
    Read more »

  • 12 Sep 2016

    Don’t bury your head in the sand: If your business is struggling, wake up!
    Read more »

  • 11 Sep 2016

    Changes in Modern Awards re Overtime
    Read more »

  • 15 Jun 2016

    The five most common mistakes SMEs make at tax time
    Read more »

  • 3 Jun 2016

    7 Bookkeeping Mistakes Business Owners Should Avoid
    Read more »

  • 30 May 2016

    Are cashflow issues keeping you awake at night?
    Read more »

  • 18 Apr 2016

    Is Your Bookkeeping Putting Your Business At Risk…?
    Read more »

  • 10 Feb 2016

    5 Essential Warning Signs to Impending Customer/Client Debt
    Read more »

  • 3 Feb 2016

    Tax shock: When it comes to tax record keeping, the shoebox isn’t dead
    Read more »

  • 3 Sep 2015

    Employee or Independent Contractor? — new ATO guides released
    Read more »

  • 22 Apr 2013

    Top Reasons for Small Business Failure
    Read more »

  • 19 Mar 2013

    Five tips for managing cash flow
    Read more »

  • 19 Mar 2013

    Profitability and cash flow checklist
    Read more »

  • 12 Mar 2013

    5 ways to make happy customers or clients
    Read more »

  • 12 Mar 2013

    Companies putting themselves at risk with unregistered agents
    Read more »

  • 30 Jan 2013

    Accountants beat banks as most trusted source of advice
    Read more »

  • 30 Jan 2013

    Tax body says SMEs using dodgy bookkeepers should miss out on deductions
    Read more »

  • 4 Oct 2012

    6 Key Areas to Help With Financial Mastery in Your Small Business
    Read more »

  • 27 Aug 2012

    Chasing cashflow a critical issue for small businesses
    Read more »

  • 16 Aug 2012

    Reportable Payments to Contractors
    Read more »

  • 1 Jul 2012

    Is a bookkeeper a luxury?
    Read more »

  • 29 May 2012

    You snooze, you lose
    Read more »

free Health Checkon your business performance