Australia is one of the leading countries around the world when it comes to start-ups and the entrepreneurial spirit. You may be feeling a bit of this enthusiasm and are planning to launch a new business soon to sell some products or services. It can be tempting to take on a lot of the burden yourself in the early days to streamline the operation and safeguard your cash flow, but you should certainly reach out for professional help in certain areas. What are some of the risks associated with DIY when it comes to your business accounting?
Getting Lost in the Process
You may have heard the adage that there are only so many hours in one day, and when it comes to a new business, that is certainly true. You need to focus on operational matters and what you're good at in the number of hours available to you following a start-up. Therefore, you need to avoid getting lost in the process when trying to do your accounts. For the inexperienced, this area can be very complex, especially when it comes to accounting for various taxes. You may think that you're saving money by doing it yourself, but if you calculate the value of your own time, you will realise that it's important to outsource to an experienced small business accountant.
Reconciling With Your Bank
One of the other problems of doing this work yourself is the propensity to cut corners. In this situation, you may decide not to reconcile your accounts with your bank balance and assume everything is okay. Unfortunately, this is a cause of many errors, which can compound as the year goes by. The tax authority expects you to reconcile, and you may be subject to penalties and interest if any errors are found.
Handling Your Employees
You will add complexity if you're taking on employees in the early days. You have legal obligations to keep records correctly and ensure that all your employees get all their entitlements. In addition to PAYG reporting, you must focus on superannuation, sickness records and leave entitlements. This can be another minefield unless you bring in a qualified accountant to help.
Accounting for GST
Depending on your projected turnover, you may need to account for goods and sales tax. This can be even more involved than employee record-keeping, but you cannot afford to make any miscalculations. Accurate record-keeping is imperative if you deal in cash transactions through your business.
What to Do Next
As you can see, there are many benefits associated with hiring a start-up business accountant and many potential pitfalls if you do not. Reach out to a business tax accounting service for more help today.