The cost of hiring an in-house accountant for your small business can be high. However, relying on accounting applications and your general understanding of finances can be highly detrimental. In simple terms, if you are not experienced in handling bookkeeping matters, you might make serious errors in your accounting. These mistakes can cripple your business and cause extensive losses. Here are some of the common mistakes that you should avoid when handling your small business accounting.
Freelancing is a difficult gig. Work can be inconsistent and the pay rates vary. Often, it can feel like a thankless and unpleasant way to earn a living, but there are wonderful moments. For instance, you have moments when you are working on a project that you have created, on a timeline that suits you, when all of a sudden the freedom and flexibility that go hand in hand with a freelance career seem worth all those fleeting moments of frustration and despair!
A BAS agent is an accounting professional who is qualified to prepare business activity statements and other accounting paperwork, and for a small business owner, their services can be very invaluable. If you're handling many aspects of your business' bookkeeping and accounting yourself, note when and why you may want to hire BAS agents and how they can assist you with company finances.
When taking on a partner or going public
Accounting is an important element to evaluate when managing your small business. Basically, accounting involves measuring, processing and communicating financial information regarding an economic entity. Your accounting practices will affect the profit margins because it will allow you to keep track of the flow of your money. Moreover, the records can help you analyse the business budget and reduce the cumulative expenses. You should encourage personal responsibility in your company to make auditing and general accounting easy.
If you're a business owner, then chances are you always hire a chartered accountant or CA to manage your tax paperwork at the end of the year. However, there are other times when you might benefit from the services and expertise of chartered accountants, even before you begin your business. Note when you should consult with a CA and how they can benefit you.
1. When setting up a business