The Real Cost of DIY or Cheap Bookkeeping
Being a bookkeeper in Perth for nearly 7 Years I have come across many clients who has tried DIY Bookkeeping but most of the time it hasn’t worked out and there is obvious science behind it, It is Vital for the health of any Business to have a professional Bookkeeper doing the Bookkeeping that you can trust.
There is nothing stopping anyone to do the Bookkeeping themselves or Hiring a Cheap Bookkeeper but the cost of doing it incorrectly is enormous. It is surprising that how many Businesses chooses to hire an unprofessional Bookkeeper to perform one of the most important Task which is Bookkeeping. Having a great Bookkeeper adds a lot of Value to the Business and the same is true for the Opposite of it.
The Following are the most Common mistakes done in DIY or Unqualified Bookkeeping,
- 1. Incorrect Reconciliations: When we get a Rescue Client (whose Bookkeeping is in bad state) this is the first place we go to check as to how the Reconciliations are done and most of the time we find the Bank Reconciliations are not either done for a long period of time or they are done incorrectly,
- 2. PAYG/Super Not Upto Date: It is Vital for the Business to keep up with all the Legislations of managing the Payroll properly as if not done correctly then it can lead to serious Bookkeeping mess with hefty fines from ATO. If the Payments are not Kept Upto date it can create a significant amount to be paid.
- 3. Data Double up: It is another most common type of Bookkeeping mistakes that we find done by unqualified bookkeepers where though the Bank Reconciliation has been done correctly but while doing the Recs the data has been entered twice leading to wrong Calculation of everything.
- 4. Wrong GST Reporting: The most common mistake while calculation is GST is on Bank Charges, Insurances, Rates, Car Registrations. Though GST is a part of Insurance and Car Registration but it is much less because of other things involved which is usually missed by unprofessional Bookkeepers.
- 5. Timely Reporting: When we sign up a client we guarantee our Clients that their Business Activity Statements are always lodged on time provided we get all the information on time. Over the years I have seen many clients getting 000’s fines because their Bookkeeper didn’t lodge their BASs on time.
- 6. Personal Expenses: Another common mistake is to enter the Personal Expenses into Business while performing the Bookkeeping. Which can lead to Serious Fines from ATO if Audited.
- 7. Not Reviewing Balance Sheets: Balance Sheet should be reviewed on a regular Basis to check for the Data integrity and to check for any mistake happened during Data Entry. Most of the times an Un qualified Bookkeeper will not know how to read the Balance Sheet leading to mistakes getting accumulated,
- 8. Not Recording Journal Entry: Another Common Mistake in unqualified Bookkeeping is not doing all the Required Journal Entries though it is out of the knowledge of a Business Owners you will be surprised most of the unqualified Bookkeepers do not know how and when to do those Journals to have everything Cleared properly.
The above mentioned points are only few of the many mistakes done in DIY Bookkeeping or Unqualified Bookkeeping. There are ways in Accounting Software to know if any of the above mentioned mistake has been done but to know about those things one Needs to have Bookkeeping Experience.
At SB Bookkeeping when we get a new Client we create a System Specifically for the Client so that Client knows how and when and what information is required by us to keep the Books upto date and helps us to maintain a Five Star Bookkeeping.
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