Small Business Bookkeeping Myths

by | 18 September, 2020 | 0 comments

Small Business Bookkeeping Myths


In your small business, it feels like you have 101 things to do. And depending on the size of your small business, that might include Bookkeeping. But is that true? And what other myths about Bookkeeping are out there, that actually hinder your accounts being accurate and relevant to you as the business owner? Our post on Small Business Bookkeeping Myths will show you some of the misunderstanding that Small Business owners might have about Bookkeeping and Bookkeepers.

We’ll cover these three areas, and you can see what Bookkeeping myths about Small Business are holding you back from having your business work for you:

1. You have to do everything yourself.
2. The Software does it for you.
3. Bookkeeping is simply a conformance issue.


1. You have to do everything yourself


When you start your business, there are a list of jobs to do, and as the owner, you often volunteer yourself or a staff member to do them. After all, it is cheaper for you to do it, than to pay someone else. Right?
Well, sort of. It won’t literally cost you dollars up front, if that is what you wanted to hear…
But it will cost you – you’re doing something that you aren’t skilled in, or have a passion for. Do you think you will do it faster or more accurately than someone who enjoys Bookkeeping (you didn’t think they existed did you?) and is skilled at it?
Of course not.

Now there will be a size where it is better for you to do it, especially if you are a left-brained analytical thinker who enjoys technical processes. But even then, as it isn’t your passion, and you aren’t experienced in it, are you certain that you should be doing it?

You got into business because you had a dream or vision. Was keeping your accounts accurate that passion that gets you out of bed in the morning?
Probably not.

But we love doing the Bookkeeping and leveraging that part of your business to help it to thrive and flourish!

 


2. The Software does it for you, right?

With the advent of superior quality accounting software, you don’t need to bother with a Bookkeeper, correct?
Well, the short answer is: no.
The long answer is: no, because….
What the software does it helps forwards the data to the right location, to get meaningful output information. But if you don’t know what information to put in, or where it goes, or what it means when it gets there, then no the software isn’t helping you. I know what the Software sellers say, but there is an asterisk next to them saying that the software does it for you.

Imagine this, you have a Piano. A cheap one. It has all the keys, and even the foot pedals. Whenever you press the keys, you get a sound. Now imagine you have a beautiful Grand Piano, and whenever you press those keys, the sound is much more beautiful. So you can see quality matters.
But that is only part of the equation.

Imagine a normal child playing that Grand Piano – would you pay money to see them play it? No, because they can’t play notes, let alone an instrumental piece. This is the way it is with the software. Your rendition of chopsticks will sound better on the Grand Piano, but if chopsticks is all you can play, then you are not getting the maximum potential out of the Grand Piano. Likewise, if you aren’t well versed in Bookkeeping and Accounts, then you are never going to get the maximum potential out of the software.

That is why having a Bookkeeper who is fluent in Bookkeeping is always going to get more out of the software than you can. It isn’t that you are not able – but the Bookkeeper has already spent thousands of hours in getting good at Bookkeeping. It makes sense they’re good at it.

 

3. Bookkeeping has to be done so I don’t get in trouble.

That is quite true. If you don’t lodge your BAS, and pay your taxes, wages, superannuation, insurances, etc. you will get in trouble. But that is really selling short what having a skilled Bookkeeper doing your accounts gives you. If you only see it as essentially a time and money tax that you have to pay to keep everything above board, you are not making the maximum potential out of the accounts side of your business.

All those numbers and fiddly tables literally mean something. Now, it might be presented in a format that makes your eyes glaze over, but what the information means is actually juicy and can change the life of your business.
A quality Bookkeeper will be able to tell you what that data means, and give you ideas as to how to address it.

What is your wages bill – and why? How much does it cost to sell 100 units of item X, why are we getting in trouble financially even though we are selling lots of our product (that could be because of your billing cycle – the money IS coming in, but not coming in before you are having to use that money you don’t have to pay something else, such as mortgage, loans, etc.), what are we actually making money on, what is easy for us to make some money on, what is losing us money, etc.

Would you know where to find all of that information?

By having an expert Bookkeeping Firm in charge of your financials, they can give you the answer to your problems, or at least show you where and what the problem is. If you cannot do that, you are really stumbling around in the dark, hoping the find the light switch to see what are those things you are stumbling over.

You’ll probably get there eventually, but we can zero in on all the relevant information quickly and concisely.

 

I hope you have enjoyed Small Business Bookkeeping Myths. Over to you….


Thank you for reading our Blog Post, and the three areas it covers. We hope you have found it useful, and see the value of getting your bookkeeping done by our firm, with an experienced online Bookkeeper, chartered accountant and trusted advisor who will show you where you business is at financially, where it is performing well, needs help, and general adjustments to really make it work well for you.

Business isn’t all about facts and figures, and profit. You have to enjoy what you are doing. But with our help, you can enjoy your business, as all your financials will be up to date and accurate, and be able to help you to make informed decisions so that your business will grow and flourish, instead of whither and fade.

You’ll be pleasantly surprised what an expert in this area can do for you.

 

If you are interested in engaging with our services, please click here and fill out the form.

We look forwards to hearing from you!

Contact InLine Partners

Get your business ready to grow today. Contact our accountant and bookkeeper team in Parramatta, Baulkham Hills, North Sydney, and Sydney CBD.

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