If the ATO called you up tomorrow and said “Guess what? You never have to lodge another tax return or BAS statement ever again!” How would you feel? And more importantly, what would you DO?
Would you laugh, cry or celebrate? Would you feel relieved?
Perhaps you would you email your accountant and bookkeeper to tell them the good news; “Sorry, mate. Your services are no longer needed.”
And with a big grin on your face, would you sit down to plan all the great things you could do with your savings of GST, tax and accounting fees? Or would you just get out there and start spending it?
Accounting is often viewed by people in business as a “necessary evil” enforced upon us by governments. However, accounting is so much more than compliance, or recording historical transactions (the past). Accounting is also about transparency and accountability (the present) and most importantly, about smart decision making (the future).
Great Bookkeeping Is About Your Future.
The reality is, that in the above scenario, if you learned that there was no more need for compliance, you MIGHT celebrate if you got that email from the ATO. But your excitement and sense of freedom would probably only for last for about five minutes, or however long it took you to realise that without accounting, you would have NO idea what to spend that money on. Or an even more scary though; what you SPENT it on.
It’s certain that the extra money you saved on tax and accounting fees would find a way to spend itself quickly somewhere else, and then you’d be back to square one; except you’d probably be a little worse off because you’d no longer have your bookkeeper or accountant to help you!
As you can see, a bookkeeper is more than just an expense… that is, if you find the right one.
10 Ways Off The Hook Bookkeeping Helps Your Business
Some of these may surprise you! Many people don’t even know what a bookkeeper does. Mostly they think it’s just organising receipts, coding transactions, paying staff and lodging BAS.
Bookkeeping is so much more that that, in fact… bookkeeping is a critical function of your business, and here’s how.
1 Giving you regular updates on your cash position
We send you a weekly summary showing you your net cash position. Most people don’t even think about this, in fact many small business owners say things like;
“I don’t worry about the P&L or Balance sheet, I just look at how much money I have in the bank”
Unfortunately this fatally flawed thinking could lead to the eventual death of your company. Why? Because the money in your bank account isn’t necessarily YOURS. Let me explain.
Let’s say you have $20,000 in your bank account today. But in days time your wages are due for $6,000, your supplier pay run is due tomorrow for $4000, three of your customers are due to pay you $8000, and your BAS is due in a few weeks for $14000, and your credit card and loan repayments for the month are going to be $3,000.
You DON’T actually have $20000 in the bank at all. You actually have $1000 “in the bank”.
Is this a shock to you? Do you find yourself “living in the moment” and spending as needed without thinking? Do you take comfort in your bank balance, and then feeling like you’re on a roller coaster when the money goes up and down like a yo-yo?
By getting regular updates on your cash position, you’ll be able to see exactly what you really have at any given time. This helps you make better spending choices, and to feel in control of your cashflow.
If you’d like help understanding your financial position, you can click here to book a free consult anytime.
2 Providing financial information for decision making
As mentioned in the last example, you may find, like many business owners that your philosophy is to “live in the moment”. If you think like that, it’s likely you also spend reactively and fail to plan ahead.
When you need to make a major purchase decision or take on debt, who do you turn to? Your business partner? Your accountant? Your wife or friend? Your puppy?!
Often your accountant will be too busy (or expensive) to speak to on a regular basis, so even if they do make time to speak to you about a major purchase, they really have no idea what’s going on inside your business, because they only look at it once per year.
You might not have a business partner, but even if you do, you need an external person who is not emotionally involved in the situation, to give you perspective. Your wife or friend who doesn’t understand business won’t be able to apply financial wisdom. So it’s really between you and your puppy! Unless you prefer to get help from us!
We help you in your decision making processes. Although we don’t tell you what to buy or not buy, we give you all the information you need to feel comfortable to make wise purchasing, investing or financing decisions.
The Profit & Loss Statement, and the Balance Sheet are a good place to start when it comes to decision making, along with the Cash Position Statement from the previous example. But it’s pretty likely you’ll need more than this.
Budgets and financial forecasts play a big part in decision making. Did your eyes just glaze over? Do you know how to create, read or understand these kinds of reports? If not, we can help.
We can prepare custom information, in the form of tailored reports, which you can view in order to see your financial and cash position, not only as it looks today, but how it is likely to look in in 3, 6 or even 12 months time.
This is determined based on trends and the impacts of certain decisions. We can show you exactly how a financial decision, purchase, financing or investment TODAY can affect the FUTURE.
If you’d like help with business decision making, you can click here to book a time to chat .
3 Helping you increase your profit
Everyone wants to increase their profit, but a lot of people don’t understand how to do it. Have you ever heard helpful advice like, “if you want to lose weight you just have to eat less, and exercise more.”
Everyone knows that is terrible advice because it doesn’t actually work. Even though biologically we are designed to consume and burn calories, anyone who has ever found themselves overweight knows how hard it is to simply “eat less and exercise more”. Usually due to emotional, psychological factors and even undetected underlying health issues, lack of sleep and stress. In these cases eating less or exercising more doesn’t help.
If you want to be more profitable, you may have heard similar terrible advice. Has anyone ever told you “if you want to be more profitable you just need to spend less, and earn more.” But after hearing this advice are you still at a loss as to how to actually apply this “simply philosophy”? When you’re working under the demands of a small business, with pressure from every side you will know that it doesn’t work like that. You need support, and insight.
We can help you increase your profit by supporting you on the journey of learning how to spend less and earn more. One of the ways we help you spend less by developing a budget and giving you the accountability to help you to stick to it.
And another great way to increase your profit is to become MORE efficient. We can help you track and measure your efficiency and show you ways to improve.
So how about increasing the income? Some bookkeepers might know how to tell you how to cut down your current costs, but not many know how to help you increase your income. We know how!
If you want to increase your income you just need to sell more! Kidding! That’s terrible advice, even though it’s true. How we can help you earn more is to analyse your current income streams, and then help you work out where you should be REALLY focusing your efforts. We help you come up with a strategy to pursue the right kind of sales.
And we also help you to close your deals more quickly, by setting up a digital quoting/proposal tool where you can collect signatures and collect payments.
If you’d like help increasing your profit, you can click here to book a free consult anytime.
4 Budgeting and monitoring your spending
Have you ever had great intentions to create a budget and then never gotten around to it? Or have you even created one and then never looked at it every again? Or do you find yourself looking at it often, realising it’s too late, that you didn’t follow it, and again, spent more than you intended?
This is so common!
We can help you establish your budget, and provide you with support and accountability, as well as helping you to put controls in place to limit unnecessary spending.
When you meet with us once per month, we can review your past month and plan the coming month, and see how you’re tracking. Remember, it’s about progress, not perfection!
If you’d like help with budgeting and accountability, you can click here to book a free consult anytime.
5 Reducing your accounting fees
Most bookkeepers charge around $65 per hour. According to the Institute of Certified Bookkeepers, that is the industry average charge out fee. But how much does your accountant charge you?
You probably have no idea! Why? Because accountants charge annually or quarterly, when they do your tax return. And you’re used to receiving a total bill, without a breakdown showing hours and hourly rates.
What you probably never realised is that your accountant is probably charging you $150 per hour for a junior, $250 for a senior and $400+ for a partner. That’s a lot! And I’m not saying that accountants aren’t worth what they charge. Some are, some aren’t. But one thing you definitely don’t want to do is pay your accountant to do BOOKKEEPING! Because guaranteed, they will be charging you $150 per hour but won’t tell you.
We can help you reduce your accounting fees by preparing your accounts in a way that will reduce the amount of work needing to be done by the accountant. The reason we can do this is that I started my career working in a Chartered Accounting firm. For 12 years I prepared financial statements and tax returns for companies and small businesses just like yours.
I know what is expected from the accountant, and so I train all my staff in the way I was trained.
If you’d like to pay less accounting fees, you can click here to book a free consult anytime.
6 Developing accounting processes
Do you ever find yourself wasting time with menial accounting or bookkeeping related tasks? Or when it comes to BAS or tax time, that you’re scrambling around trying to find everything for your accountant or bookkeeper? Or are you simply finding that your business is not as profitable as you would have hoped?
Accounting processes, and all business processes for that matter, are created for the purpose of creating efficiencies. A business with solid processes will be, not only more efficient, and therefore profitable, it will also be more VALUABLE. Especially when it comes time to SELL your business.
A business with established and documented processes is more valuable on the market than a business without them, for the simple fact that the new business owner can take over where you left off.
But even if you’re not thinking about every selling your business, processes are vitally important. When it comes to accounting and bookkeeping, having easy-to-follow, simple and effective processes can mean that the headaches for you and your staff are reduced, or even removed.
From day one, we start documenting your bookkeeping processes and creating a manual for this area of your business. That way, if you ever decide the timing is right to hire your in-house bookkeeper or accountant, everything will be there for you.
We can help you and your team establish routines, and provide you with step-by-step, personalised guides to cover every area of your accounting function.
>>> Ok, so just a word of warning, the next 4 items on the list are just your standard, boring bookkeeping tasks that most bookkeepers can offer so feel free to skip this bit! <<<
In fact, if you already love what you’re read so far and would like some support, you can click here to book a free consult now.
7 Preparing and Lodging Your BAS
Did you know that a bookkeeper who is not a Registered BAS Agent is not allowed to prepare your BAS. In 2010, the Tax Practitioners’ Board (TPB) regulated the bookkeeping industry to get rid of bookkeepers who were putting small business owners at risk.
Have you every had to pay someone to fix up the work done by a bookkeeper who was not qualified, certified, registered or even insured.
You would be surprised to know that “providing a BAS service” means doing ANY task that is related to the BAS preparing, including applying GST codes to transactions, processing payroll or preparing the actual BAS statement on your behalf. That means an unregistered bookkeeper isn’t allowed to do any of those things unless they are supervised by a BAS Agent or Tax Agent, OR if they are your employee (this rule then doesn’t apply for some reason!).
If a bookkeeper wants to get registered they need to have 1,400 hours supervised hours of BAS related work experience, signed off by a BAS or Tax Agent, as well as a minimum of a Cert IV in Bookkeeping or Financial Services.
Is it important to you to know you’re protected if anything goes wrong?
Your bookkeeper also needs to have Professional Indemnity Insurance of at least $250K AND they need to do 45 hours of ongoing professional development and study every three years to remain registered. Once registered they need to follow the Code of Conduct of the Tax Practitioners’ Board which is great, because it means that if your bookkeeper doesn’t follow that code, you can report them to the TPB who can take action on your behalf.
And you’re also covered by the TPB’s Save Harbour laws which mean that if your bookkeeper fails to take reasonable care, makes a false or misleading statement that leads to a BAS shortfall, or, fails to lodge on time resulting in penalties, then you’re protected. As long as you personally have not been reckless, intentionally disregarded tax laws, or been involved in a “tax avoidance scheme” then you or your bookkeeper can request “Safe Harbour”.
Would you like to get an additional month every quarter to lodge your BAS? Sounds great! Your BAS agent gets extended lodgement dates and can pass them onto you, giving you extra time to plan, save and get organised.
There are so many reasons to go with a BAS agent to lodge your BAS.
Do you want the peace of mind of lodging through a BAS Agent (a Certified Bookkeeper)? If so click here to book a free consult now.
8 Processing your payroll
Do you have employees? Have you ever tried to figure out payroll and gotten overwhelmed?
We can take over your payroll responsibilities to ensure your employees get paid on time, and have all of their entitlements and allowances covered.
9 Paying your bills
Did you know your bookkeeper can pay your bills for you? Or at the very least provide you with a list of payables.
10 Reconciling your accounts
Reconciling the bank accounts are obvious if you every logged into Xero but what you probably didn’t realise is that EVERY account on the balance sheet needs to be reconciled! Crazy, right?
Reconciliations are this word that bookkeepers use all the time, and basically what it means is that EVERY transaction has TWO sides (aka Double Entry Accounting).
Doing a reconciliation makes sure the the transactions BALANCE (ie equal the same on each side) and that both sides are allocated to the right place.
Without going too much into the boring details, in a nutshell, reconciling all the accounts means your reports and balances are ACCURATE. Meaning that they are an ACTUAL representation of what is happened.
There is a saying in accounting, “Garbage in, garbage out” which means that if what is going into the accounts isn’t accurate, the reports coming out will also be wrong.
And as you saw in examples 1 to 6, accurate financials play a major part in your decision making, efficiency, profitability and, as a result, your sanity.
Let’s work together
As you can see, of the 10 ways a bookkeeper can help your small business, the last 4 items were the typical things you expect a bookkeeper to do, and those paragraphs were quite small, and a bit boring!
But how about the first six? Were they unexpected? Did you KNOW that’s what a bookkeeper can do for your small business? Did you find that information helpful?
We’d love to speak to you about how we can help you in the same way we’ve helped many other small businesses over the years.
Thanks for reading,
CEO & Founder
Off The Hook Bookkeeping
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