Choosing a bookkeeper is one of the most important decisions for any business owner. While it’s tempting to cut costs, cheap bookkeeping can quickly turn into expensive mistakes that hurt your business in the long run.
Cutting corners with your books can lead to ATO penalties, tax surprises, poor cash flow decisions, and sleepless nights worrying about your business’s financial health.
Whether you’re a business owner in Sydney or anywhere else, choosing the right bookkeeper is crucial. Here’s how to get it right.
Why “Cheap” Isn’t Always Best When Choosing a Bookkeeper
Many small business owners try to save money by:
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Doing their own bookkeeping
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Hiring low-cost, inexperienced bookkeepers
- Asking friends or family who “know a bit about Xero” to help
However, what seems cheap upfront can quickly become expensive. Here’s why:
✅ Incorrect coding of transactions – this leads to reports that show the wrong profit and might mean costly corrections later.
✅ ATO audits and penalties – Mistakes in BAS lodgements, unclaimed GST credits, or under-reported income can bring unwanted attention from the tax office.
✅ High year-end accounting fees – Your accountant may spend hours fixing errors before they can prepare your tax return.
✅ Wrong business decisions – If your reports are wrong, you could end up hiring staff or making investments you can’t afford.
✅ Major tax issues – For example, Division 7A problems happen when business owners take money from the business the wrong way.
✅ Missed claims – Such as vehicle deductions or registering for GST at the right time.
Therefore, cheap bookkeeping can become one of the most costly mistakes a business owner makes.
Top Tips for Choosing a Bookkeeper and Avoiding Costly Mistakes
If you’re looking for a bookkeeper in Sydney – or anywhere in Australia – here’s what to check before you hire:
1. Check BAS Registration
Always ask if your bookkeeper is a Registered BAS Agent. You can search their registration here: Public Register | Tax Practitioners Board
A BAS Agent is legally authorised to:
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Prepare and lodge your BAS with the ATO
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Deal with the ATO on your behalf
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Provide GST and payroll advice
This protects your business and helps you follow the rules. If your bookkeeper isn’t a BAS Agent, they’re limited in what they can legally do.
2. Ask About Industry Experience
Different industries have different bookkeeping quirks. For example:
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Construction businesses deal with retention payments and progress claims.
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Professional services firms manage WIP (work in progress), deposits and sometimes progress payments.
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Hospitality businesses handle daily takings, tips, and cash.
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eCommerce businesses deal with large volumes of transactions, multiple payment methods, inventory, and cost of goods sold.
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SaaS businesses have unearned revenue and need to track subscriptions over time.
As a result, it’s important to pick a bookkeeper who understands your industry and can speak your language.
3. Test Their Knowledge
Don’t be afraid to ask specific questions like:
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How would you record the purchase of a vehicle?
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When should a business register for GST?
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How do you handle Directors’ loan accounts, and what reports can you provide me to ensure I’m on top of any Division 7A issues?
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What happens if private expenses go through the business bank account?
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How do you treat deposits and prepayments in the accounts?
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Do you know the difference between accrual and cash accounting and which method do you use for my business?
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Do your prices include processing all invoices and attaching the invoices into the accounting software, or is everything just coded via bank transactions without supporting documents?
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What receipt capture tools do you use (e.g. Dext, Hubdoc), or do you enter transactions manually (which can be prone to errors)?
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Do you have experience managing payroll, including reading employment contracts, calculating annual leave, and handling things like paid parental leave? If you don’t know the answer to a payroll question, is there an HR professional or specialist you can refer me to?
A skilled bookkeeper should answer these questions confidently. Alternatively, they should be able to tell you when they’d seek advice from another professional.
4. Ask About Business Continuity
Here’s a question many business owners forget:
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What happens if you go on holidays or become unwell?
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Do you work alone, or is there someone else who can step in and keep my accounts running smoothly?
It’s wise to choose a bookkeeper with systems and support in place so your business doesn’t fall behind if they’re unavailable.
5. Look for Proactive Communication
A good bookkeeper doesn’t just process numbers. Instead, they should:
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Warn you about problems before they get expensive
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Help you understand your financial reports
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Work well with your accountant
On the other hand, if your bookkeeper only talks to you at BAS time, that’s a warning sign.
6. Check Software Skills
Most businesses use cloud accounting software like Xero, MYOB, or QuickBooks. Your bookkeeper should:
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Be certified in your software
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Know how to use time-saving features like bank rules and automation
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Understand integrations with other apps you use
7. Ask How They Work with Accountants
Bookkeepers and accountants should be a team. A professional bookkeeper will:
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Keep your books clean and up to date
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Communicate regularly with your accountant
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Help ensure tax returns are prepared quickly and accurately
This teamwork saves you money at year-end.
8. Focus on Value – Not Just Cost
A quality bookkeeper is an investment rather than just a cost.
They help you:
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Make smarter decisions with accurate numbers
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Plan for tax instead of scrambling to pay surprise bills
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Avoid expensive mistakes that can hold your business back
In short, choosing a bookkeeper isn’t only about price. It’s about protecting your business and giving you peace of mind.
Conclusion
Choosing a bookkeeper isn’t just another business task – it’s a decision that can either protect or jeopardise your financial health.
While cheap bookkeeping might seem appealing upfront, the hidden costs can be significant. From ATO penalties and costly corrections to poor financial visibility that leads to bad decisions, cutting corners often costs far more in the long run.
The right bookkeeper will help you:
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Keep your records accurate and up to date
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Avoid costly tax and compliance mistakes
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Understand your financial position with clarity
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Plan for the future with confidence
If you’re serious about growing your business, invest the time into choosing a bookkeeper who understands your industry, communicates proactively, and has the qualifications to handle your business’s unique needs.
At Inline Partners, we believe bookkeeping should be the solid foundation of your business…not a cost-cutting exercise. Whether you’d like us to work alongside your current bookkeeper or take care of everything for you, we’re here to help you stay compliant, proactive, and profitable.
Ready to stop worrying about your books?
