5 Effective Tips for Maximising Your Tax Refund This Year

Whether you earn money from work or investments, you usually need to pay tax on your income and fill out income tax returns. You can also get tax deductions from certain expenses. Unfortunately, many people miss legitimate tax deductions they truly deserve. To make sure you get the full tax refund you are entitled to this year, here are some tips you should consider:

Save and organise your receipts

You may spend countless hours tracking down receipts for purchases you made over the previous year during tax time. As a result, you waste time and probably lose hundreds or even thousands of dollars in your refund. Because of this, you should file your invoices and documents and save every relevant receipt. 

For instance, whenever you make a work-related purchase, keep your receipts and place them in a folder. If you are working from home, save invoices of the Internet, power, phone, and water and note in a logbook or diary how much time you spend working at home. 

Meanwhile, it’s advisable to save receipts if you are unsure whether that expense is deductible or not, then consult your tax consultant for advice.

Claim all the tax deductions you can

Getting a higher tax refund is possible by claiming all the tax deductions you can. Therefore, claim deductions for every work-related expense that you are legally entitled to and costs your employer has not already reimbursed you for. These include tools and equipment, such as Internet bills, meals, travel expenses, and laundry.

Make charitable donations

Stand up for a good cause you care about while lowering your tax bill by making charitable donations. Donating small amounts might not seem like much, but they can add up to hundreds of dollars across the year. Be sure to save your receipts, and then you can eventually claim your tax deductions. 

Don’t rely on pre-fill data from the ATO

Filling the fields with pre-filled data from the Australian Taxation Office (ATO) may seem like a shortcut that can help you save time and effort, but it’s actually not. Remember that banks may pass information onto the ATO late, making your data out-of-date. Therefore, it is still better to use your own information as your source data. 

Note also that the simplest of mistakes can hold up your tax return. When providing your details, check it multiple times to ensure it is error-free. Check your spelling and grammar, confirm your information, see if it matches your tax file number, and get your bank details right to ensure your funds reach your account.

Hire an expert

Tax can be complicated, especially if you lack knowledge about it. Save yourself the stress and hassle of dealing with this on your own by hiring a tax professional. This way, you can guarantee maximum refunds and ensure you prepare your taxes accurately.

Conclusion

Taking advantage of a bigger tax refund can be challenging, especially if you don’t know where to start and you are worried about getting in trouble with the ATO. Fortunately, you can achieve this and save money in the long run by following these practical tips. You can also seek assistance from experienced tax professionals like us to get the help you need.

If you are looking for skilled accountants in Caloundra, reach out to SMB Accounting. We offer a range of accounting services, and you can reach out to us through in-office appointments, phone interviews, or online submissions. Contact us today!

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How Xero and Other Online Tools Can Benefit Your Accounting

Technology has made it possible for processes to be a lot easier these days. There are new ways to keep track of your small business’s progress, including your accounting. Online tools like Xero have made accounting and bookkeeping so much easier. They allow you to access your financial information and reports at any given time and provide insight into where you stand. Here are the benefits of utilising Xero for your business:

The Benefits of Using Xero for Business Accounting

1 – Xero is Convenient and Easy to Use

Conventional accounting software used to be challenging to understand and use, so much so that only accountants had the time of day to understand them for you. With Xero, you can check things easily on the cloud and maneuver your way through your numbers. Business owners and accountants alike benefit from this convenience. Its tools also make reporting and creating invoices quick and convenient. It can be accessed even when you’re on the go!

2 – Xero Keeps things Transparent For Your Business 

Numbers don’t lie. When everything is transparent, you can conduct business much better, knowing your spending and what affects your profits most. With this accounting tool, you can determine if you can afford certain expenses. It can also show you what your habits are like and help you figure out what to cut back on.  

3 – Xero Makes Data Interpretation Easy

With automated reporting systems in place, data interpretation becomes much faster. Old accounting software made things that only accountants can understand, thus giving them the need to produce their own reports that were easier to understand. Automated reports take away that task from them. They tell you exactly what you need to know without having to meet or call your accountant. 

Do I Still Need an Accountant with Xero?

While this application does make things much more convenient, it still takes time to input the numbers and track the receipts. While Xero makes things more manageable, it still doesn’t eliminate the work. If you want to get rid of accounting tasks on your calendar entirely, get an accountant that can use this accounting software.

Having an accountant takes the work off your shoulders to focus on other aspects of your business. Most accountants will ask you to get this application so that you don’t have to call them for status updates. Your files will be safe and updated. Business can go on as planned.

Conclusion

Accounting is complex and requires an organised mind to keep things in check and order. Xero makes processing your financial figures and simplifies the work for you. It puts everything in the cloud, so you’ll never lose your data. But if more accounting tasks need handling and you have no time to manage your Xero account, you can always find someone to handle it for you.

Are you a small business looking to get their accounting straight? Perhaps it’s about time to consult one of the best accounting firms along the Sunshine Coast. SMB Accounting can handle your Xero account and help you with other bookkeeping tasks so you can focus on more critical aspects of your business. Contact us now!

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What to Know about Claiming Expenses with No Receipts

If you have been claiming tax deductions even when you don’t have a receipt, you should be aware of the possible repercussions because of the stricter rules set by the Australian Taxation Office (ATO). However, there may still be instances when it is acceptable to do so.

When you want to improve your tax refund, tax deductions may be the best way to do it, and these make the tax system fairer in a way. The idea is that if you spend money on something that is connected to how you make a living, you can get a refund for that. 

For you to better understand this all, your trusted small business accounting experts will break it down for you in this article:

What Does the ATO Say About It?

According to ATO, if you purchased work-related items but you were not able to keep the receipt for that purchase, you can still claim up to $300, which is the maximum value.

But what if you spend more than $300? You may still be eligible to make a claim, but with no receipts, there’s always a possibility that you’ll be denied.

Can You Claim Food Expenses Without Receipts?

You should know that under normal circumstances, you are not allowed to make deductions for regular living expenses. The only exception is if your work situation obliges that you eat in your company café and you cannot come home to eat. And even then, you do need your receipts to make deductions.

Why Do You Need to Keep the Receipts for All Your Expenses and Purchases?

As tax time draws near, Aussies typically start preparing for their refund by collecting their receipts and other records that they can use to get their deductions. Any tax consultant will tell you that the easiest way you can get the ATO to approve your deduction is by presenting them with receipts.

Indeed, it is not always possible to get receipts, and the ATO understands that. Still, if you want to get refunded, you need to be able to show them how you were able to come up with the total amount of deductions. As such, you have to present them with proof like bank statements or whatever is appropriate. 

Some examples of expenses that you may not be able to get receipts for include work-related expenses for your car, costs of uniforms, and more. Phone calls, training, travel, and more are also some work-related expenses that you can get a refund for. 

Again, you can still get your deductions without a receipt, but you cannot get more than $300.

What Specific Expenses Can You Claim Refund For? 

One of the things you can get a refund for is travel expenses. However, you should know that your daily commute to and from work does not count as a travel expense. However, if you get asked to attend a conference in the next town, then you can add that travel cost to your deductions.

If you pay for your uniform, and it’s specific to your job, then you can claim that amount as well. Furthermore, you can also claim the cost of the required courses that you had to take.

What Expenses Are Considered Allowable?

For an expense to be allowable, you should be able to answer the following questions with a “yes”:

  • If they’re directly related to or needed for your occupation
  • If you paid for them yourself
  • If your employer did not reimburse you

Conclusion

There is no assurance that you will be granted a refund without receipts. For this reason, as much as possible, you must always collect those receipts so that you can present them to the ATO. While you may be allowed to get a refund for a limited amount when you don’t have the receipt, it is never assured.

If you have more tax-related questions, SMB Accounting is here for you. You can speak to our tax professional in Australia so that you can learn more about deductions and other tax-related matters!

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5 Legal Ways to Cut Down Your Taxes as a Small Business

Every registered business is expected to pay off its taxes. It does not matter how much they make; paying taxes is a responsibility every entrepreneur needs to carry to do business. Fortunately, if you are an SMB owner, you can explore several ways to minimise the tax you need to pay. This article would tell you the five ways you can save on business expenses:

#1: List down where your money is coming and going 

A list is necessary for two reasons:

First, it helps you remember how your money flows. Record-keeping in a small business should be done as meticulously as possible to make sure you do not miss anything. While you’re at it, ensure that all the receipts under the pieces are well-kept so you can use them as a reference later. It is also your legal responsibility to keep all receipts and official financial records for several years.

Second, the Australian Tax Office (ATO) asks more questions about tax deductions now more than ever. It is essential to equip yourself with the correct information, especially when talking about your business. The records could help you understand and access your data better.

#2: You can deduct donations from your tax

If your company conducts charity work, you can add them to your tax deductibles. This option applies to initiatives that exceed $2. The best thing about this is that you can claim the amount you donated via your tax return. It does not have to be cash. The amount you donated would be deducted from your taxable income. Therefore, you get a reduced to-pay amount by the end of the business year.

#3: Have a list of the things you can claim as a tax deduction

You need to familiarise yourself with items that you claim as tax deductions, so you have an idea of what you can refund later. Some of these might be transportation expenses, item purchases for work, repairs and maintenance, operating expenses, salaries, wages, contributions, and more. Check out the complete list here.

As always, make sure that you have the receipts with you. If you have questions about items you can claim for your tax deduction, you can always speak with your tax consultant so they can explain everything clearly.  

#4: Research and compare before making decisions

If you have no private health insurance coverage and you need to choose between a basic private health cover plan and a Medicare levy surcharge, always check the specifics of your options first. 

In this case, individuals without insurance earning more than $90,000 who opt to get the Medicare Levy Surcharge would, in total, have to pay 1% more in addition to the 2% mandatory tax for Medicare. 

On the other hand, if you compute and choose the basic private health cover plan, the total amount you need to pay for it would be much less than what you would pay for Medicare. 

#5: Get a tax consultant or a dedicated accountant

These people already understand the ways you can reduce your taxes and business expenses. They could alleviate your worries about taxation and boost your savings on your taxes in entirely legal ways.

Conclusion

Learning the different ways you can lessen your taxes is nothing to be ashamed of. If it is legal, it does mean you are escaping from your obligations. In fact, the recommendations listed above were specifically made to help small-medium businesses minimise their tax liability and maximise their income. Use the money you save to grow your business, pay your debts, and make more investments. 

To ensure that you have all the opportunities to deduct your taxes covered, make sure to seek SMB tax solutions from tax deduction tradesmen. Here at SMB+ Accounting, we offer a wide range of accounting services, including taxation, business advice, XERO/MYOB/Quickbooks consulting, and more. Get in touch with us to learn more about how we can help you. 

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Effective Tax Tips Every Business Owner Should Know

Every business owner aims to run their business seamlessly. When it comes to tax matters, nobody wants to be paying more than the right amount. That is why it is vital to have well-organised and efficient financial records. It will help you avoid issues during tax time and alleviate the risks of paying the unnecessary amount due to accounting issues.

Every company should be updated with the approaching tax deadline to avoid cramming when papers and records are to be submitted. Organisation is essential when getting ready for tax time. You can use the various tools, software and resources that are available nowadays. They are user-friendly and can help the business organise its transactions efficiently.

Consider the following tax tips:

Commit to a clean bookkeeping process

Effective and organised bookkeeping is the best tool for business owners to reduce the tax season’s stress. With today’s various accounting tools and software today, there’s no excuse that your accounting department will be stuck with the stressful manual methods of recording and balancing transactions. These tools are automated and pose higher accuracy than the manual accounting method.

Every company should ensure that the following essential bookkeeping processes are done appropriately:

  • Monitoring income, sales and profit
  • Tracking various expenses
  • Creating, modifying and sending invoices
  • Managing the business’s overall bank transactions

When your financial records are all updated and organised, you will avoid having penalties due to incomplete or incorrect tax returns.

Clear monitoring of every business expense

Some small business owners disregard claiming their business expenses, mainly because they lack a reliable and efficient system for documenting every expense coming out. There should be a receipt for everything you pay so that you will be qualified for a GST or a tax deduction. 

Use a system to document all your receipt data, expenses report and track mileage. You can also choose a tool that can help you sync all accounting processes in one. 

Make sure to have separate business and personal financial records

It is crucial to clearly divide the personal and business financial records, specifically the expenses. This will help in making it easier to claim the proper deductions from your tax return. These records will also be used during an audit.

The following steps will help you recognise and separate your personal and business finances:

  • Have a separate bank account for your business. You can also designate a credit card and use it solely for business purposes. 
  • Avoid combining your personal expenses with your business expenses. For instance, buying a printer ink for your home and office should have two different receipts.
  • Allocate a set salary or a standard drawing from the business account each month to learn how your business income will be taxed.

Always consult with a professional accountant

There are times you’re not really sure how to organise business transactions before putting them on record. You may not yet know which accounting software will be best to use. Or, you may need further information on how the tax law works in your area. This is why you need to consult with an accountant. A professional accountant will help you organise your financial transactions and prevent tax issues in the future.

Conclusion

Bookkeeping can be a stressful process, but this is an integral part of the business. To make your tax affairs simple and free of errors, it would be helpful to seek assistance from a professional accounting firm to support your business’s long-term financial matters. 

If you’re looking for accountants in Sunshine Coast, QLD, SMB Accounting has the best to offer. We can help you with your taxes and manage your businesses’ finances. Contact us today for more details. 

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Why You Need an Accountant: 5 Ways They Save Your Money

Managing your business without the help of an accountant is a business that’s doomed to fail. From compiling reports and tracking expenses to understanding tax rules and handling the audit process, an accountant’s responsibilities are invaluable to the survival and success of any company! But apart from all the tasks that they do, accountants are actually one of the driving forces that help you save money on your day-to-day operations. 

Here are five areas of business where they can deliver cost savings to your company.

Handles Cash Flow Management

Any business, whether big or small, heavily relies on the strict management of expenses and earnings. Your accountant will work with you to develop a cash flow statement to help you monitor how much money goes in and out of your company. It’s now up to you to decide whether you need to reduce costs or make price adjustments to keep your cash flow at an acceptable level!

Provides Excellent Bookkeeping

Keeping detailed and accurate records of all financial transactions in your company is also one of the most important duties of an accountant. But more than that, they can also develop a more efficient record-keeping system for your operations. This saves you time and allows you to focus on more important business dealings that require your full attention.

Identifies and Manages Mistakes

A competent accountant can look over your paperwork and help streamline the financial process to avoid any costly mistakes. 

If for some reason, you submitted an incorrect tax return, then that could cost you by being penalised by the Australian Tax Office (ATO). You will then be required to pay back the taxes owed from previous years plus penalties! However, having an accountant you can rely on will make sure this would never happen to you—or at the very least, they know how to remedy and rectify any mistakes made!

Maximises Tax Deductions

No one expects the business owner to manage an entire business, make important decisions, and still be able to keep up with the latest tax rules. That’s where a tax professional like your accountant comes in to help you with your tax deductions. 

If they know exactly what they’re doing, they can save you even more money by claiming more tax deductions that even you wouldn’t have noticed! The result is having a lower taxable income that will reduce how much tax is owed by the business.

Grows Your Business

If you want to see your company transform from a startup to a highly profitable business, then working with your accountant is what you need to achieve that. Treat them as a critical advisor to the growth of your business since they have the experience and the unique financial perspective you need to make important decisions. They can help you develop a sound business plan and make sure your goals are achievable, realistic, and financially sound.

Conclusion

Beyond the number-crunching and financial reports, your accountant can save you money in ways you can’t always imagine. It’s simply what they do best! As a business owner, you would do well to take advantage of their knowledge and expertise if you want your company to succeed.

Entrust the growth of your business in the capable hands of SMB Accounting! We are a reputable accounting firm composed of tax professionals, audit specialists, and business accountants offering outstanding services to our clients in Brisbane, Melbourne, Perth, and the Sunshine Coast. Get in touch with us today and become our partner!

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6 Ways You Can Save on Taxes Through Superannuation

Looking for ways to save on tax? Superannuation is one of the most effective ways to do this, and there are ways you can contribute to your super, depending on your personal circumstances. Generally, you will pay 15% tax on superannuation contributions from your pre-tax salary, which includes employer Super Guarantee and salary sacrifice contributions. 

The earnings you make on your money within superannuation will be taxed at a minimum of 15%, but if you’re getting pension through your super, your earnings will be tax-free. Now, here are tips to save on tax with super: 

Don’t Go Above the Caps

When you make contributions into your super, don’t go above the cap. Why? When you exceed them, your tax advantages will no longer be applicable, and your super contributions could be taxed up to 94%. 

Seek Professional Advice

Tax can get complicated, which means you should consider discussing your personal situation with an accountant. If you earn a higher income, it would be helpful to boost your super as this can reduce your marginal tax rate. Those who are earning a lower wage or on a break from their career would help to look into opportunities that can help you contribute to your super, and that’s something a professional can help you with. 

Have Salary Sacrifice

Another way to save money on tax with the use of superannuation is to ask your employer to pay some of your salary into the super. Therefore, it’s called salary sacrifice, which is usually on top of the Superannuation Guarantee minimum percentage payments. 

Before you ask your employer to do this, it’s essential to check first how the company treats salary sacrifice contributions. 

Consider Government Co-Contribution

The amount you earn and contribute to your super will determine whether you’re eligible to receive a government co-contribution and for how much. If you’re eligible, the maximum co-contribution is $500 every year. 

Consider Personal Super Contributions

You can boost your super by adding your own contributions. Your personal super contributions are the amounts you contribute to your super fund from your after-tax income. Keep in mind: personal contributions are non-concessional contributions that will count towards the non-concessional contributions cap unless you claim a tax deduction for them. 

Use Spouse Contributions

If you’re in a relationship and have made contributions under the threshold to your spouse’s super fund, you may be eligible to get a spouse contribution tax offset if your spouse was under 70 at the time the contribution was made. 

Conclusion

There are plenty of ways to save on taxes, and one of them is using your super. Now that you know the ways you can do this, why don’t you start saving on taxes? If this is too complex for you, it’s crucial you seek professional advice from an accountant to help you navigate your taxes. An accountant will provide you with the best solution that will help you better save on taxes. 

So, your first step is to hire an accountant, and from there, you can develop ways to save on your taxes. 

SMB Accounting has the best accountants on the Sunshine Coast. We can help you save more on taxes. Contact us today to get started!

 

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An Overview of Tax Deductions on Workplace Uniforms

Several jobs require wearing a uniform for different purposes. It can be a standard operating procedure to distinguish different personnel in the workplace. A uniform is an aesthetic and functional choice common in hospitality, dining, and event sectors. They can serve as a more practical option for performing different tasks with the wearer’s safety and protection in mind. This is necessary for volatile workplaces, common in construction, plumbing and cleaning services.

Most uniforms need to be distinct to a particular brand of a service provider, making them a costly expense if you’re shouldering its purchasing costs. Thankfully, it’s highly likely that you can get decent cashback during tax repayment season.

 

How to get your cashback from work uniform purchases

The most important requirement to claim a tax return is to ensure what classifies as a business expense. In the case of uniform purchases, you need to ensure that it qualifies under specific categories to receive a cashback.

In this article, we’ll share a three-step guide illustrating how you can certify your tax return for work uniforms.

 

Step #1: Confirm if you own a compulsory uniform

Compulsory uniforms are mandatory clothing employees need to wear in the workplace. It usually contains the company logo together with your place of work. The entire attire is considered a compulsory uniform, including single items such as shirts or ties, even if it doesn’t include branding logos. However, it must be a company-mandated brand, colour or style option that you should wear.

In contrast, non-compulsory uniforms are clothing pieces that your employer encourages the staff to wear but doesn’t enforce it. Unless the uniform is registered with the AusIndustry, you cannot claim that your work clothes are part of the registered uniform.

Besides brand-specific apparel, protective clothing and costumes can also count as compulsory uniforms if they’re necessary to perform your job. This covers people in trade businesses or performers who need to be in character for a role in a paying gig.

 

Step #2: Confirm your laundry expenses

Besides the costs of purchasing your work uniform, you also have the right to make a claim or the laundry expenses for maintaining your uniform. This should account for the general acts of washing the clothes through a laundromat, from washing to dry cleaning when necessary. It’s easier to compute the values if you’re using a laundromat. Doing the washing and ironing yourself, however, makes for a more complicated calculation.

 

Step #3: Check if you have company allowance for purchases and maintenance expenses

Some companies provide reimbursements or laundry allowances, especially if their uniforms need to receive deep cleaning before use. Thankfully, you can still claim a deduction even after receiving a subsidy. However, it’s necessary that you claim the corresponding deduction on your expenses and not on the full amount of your allowance.

 

Conclusion

Being extra cautious about your work expenses isn’t something you should be conscious of. The time you spend while employed is enough to give you the right to claim what’s yours, whether in the form of a salary or a tax return. If you’re not too adept at handling your own accounting, you can hire an accounting expert to supplement your tax and bookkeeping needs.

If you’re looking for a reliable accounting firm on the Sunshine Coast, we can help. At SMB Accounting, our professional accountants we perform different forms of tax services, from trust account audits to individual tax returns. Contact us today at 1300-854-159.

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5 Reasons to Hire A Small Business Accounting Firm Today

Keeping accurate and up-to-date financial records is vital in business. If your books are untidy, it affects all aspects of your company. You won’t be able to pay employees or contractors on time, make ill-informed executive decisions, and hinder your growth. 

If you are busy, though, you might not have time to organise your business’ finances. If so, you should consider hiring a small business accounting firm. Here are the benefits of having a third-party provider handle your company’s finances.

 

Small Business Accounting Providers Save You Money

When you hire a tax professional, you streamline payments and financial documents preparation, helping you save your resources in the long run. In business, time is money. If you hire someone to itemise your expenses, pay your bills and send invoices, you free yourself up to manage other aspects of your company. 

Also, getting a contractor is more affordable than having an in-house accountant. You won’t have to train a contractor or provide medical and dental benefits for them. Since compliance rules and technology change often, you don’t have to worry about your employees making decisions and practising outdated information.

 

Accounting Service Providers Ensure Department Continuity

When you have an accounting provider, you have a team of individuals dedicated to your account. If you have an employee who takes a vacation, falls ill or transfers to another company, you won’t have to worry about disruptions to your documentation. Since you’re hiring professionals, you’re sure to minimise the chances for errors or fraud.

 

Accounting Service Providers Help In Risk Management

Outsourcing financial management means your contractor is responsible for keeping up with tax codes and ensuring your business is compliant. They also have safeguards against internal fraud. If you have an internal employee doing your accounting and bookkeeping, you risk your financial privacy. You are not sure how long your employee will stay with you, and they might discuss your finances with outsiders they leave. A small business accounting firm ensures that you keep your business matters confidential.

 

Accounting Service Providers Give You Timely Reports

When you outsource services, you will get regular, timely, and accurate reports. These allow you to safeguard your business’ health, plan for audits, avoid unnecessary costs like penalties and fines, and prepare for filing taxes. Your accounting services will likely have best-in-class management processes, timing your receivables and payables perfectly.

 

Accounting Service Providers Use The Latest Technology

High-quality service providers test the latest technology in bookkeeping, accounting, and time tracking before using these in their accounts. Your company will benefit from the access to these solutions; you don’t need to buy tools, learn how to use them, and ensure that they are up-to-date. 

Also, bookkeeping and accounting service providers let you make data-driven decisions that reduce costs and improve your cash flow. They help you find the best ways you could increase your revenues and boost your growth.

 

Conclusion

When you’re managing a business, you want to do what you can to keep it growing. However, without proper financial management, your company will find it hard to maintain its cash flow. Outsourcing your bookkeeping and accounting will streamline your finances, letting you focus on other things in your business that need attention.

Team up with SMB Accounting for all your small business accounting needs. We work out of the Sunshine Coast, helping entrepreneurs and business owners set up and maintain their enterprise’s accounting systems. Sign up for one of our packages or contact us to learn more!

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3 Outcomes When You Slack with Your Bookkeeping Tasks

As someone who has been running a small business, you may feel that bookkeeping is a time-consuming and tiring task that you would rather avoid at all costs.

Although there are other tasks to worry about or consider whenever you work on your business and ensure that it’s running smoothly, the truth is that your books bear the same amount of importance. Unfortunately, many business owners end up overlooking this particular and end up neglecting their bookkeeping entirely, making way for a host of problems in the long run.

What happens when you neglect your bookkeeping?

At this point, it’s best to understand that overlooking your bookkeeping tasks will prove to be a grave mistake when you look at the after-effects. In fact, failing to keep an eye on your records and figures is a problem that can create a multitude of problems for you and your business.

Considering that bookkeeping itself is critical for ensuring that you have all the necessary reports and insights to address different parts of your finances, these are three problems that can arise from neglecting it: 

Outcome #1: You are bound to run out of money before you even realise it

Whether it’s because you didn’t bother to lodge your returns or delayed your receipts and receivables, you’ll run out of money by making this simple mistake. It may sound pessimistic, but this is the absolute reality: it is easy to lose a grip on your cash flow and strip your business of the funds it needs to grow when you fail to maintain your books. 

In fact, not maintaining your books will eventually put you in a tough financial spot because you lose the ability to manage your cash flow as best as possible. Furthermore, such an outcome can take place because the inability to handle your finances can lead to a host of problems, such as:

  • Being unable to track money that is owed to you by customers, clients, and partners (receivables)
  • Not knowing how much you need to allocate when settling your payments and debts, leading to some relationship strains along the way

Outcome #2: You won’t be able to make the necessary decisions to help your business grow

Another undesirable outcome that stems from not managing your books as well as you should is that it inhibits your ability to forecast and make smarter decisions. In the end, this will hinder you from maximising opportunities that lie ahead.

You see, failing to reconcile your accounts and update your books as you should can cause information depletion that can prove to be the biggest hindrance to your business’s growth. When your negligence piles up, you’ll end up at that point where you won’t be able to make smart decisions since you don’t have the accurate data or insight that is required for critical decision-making processes!

Outcome #3: You will commit different errors when it comes to your payroll

If you were to look at a list of cases where businesses didn’t properly handle their payroll errors, you’ll quickly realise that many of them are rooted in bookkeeping negligence.

While it is no surprise that your business relies on employees to stay afloat, being negligent with your bookkeeping can still lead to severe problems since your records are crucial for paying them properly. Once you constantly ignore your books to the point where it feels like second nature, you’ll be unable to track and distribute the pay benefits of your employees accurately, causing several outcomes to arise: 

  • Failing in the collection of taxes
  • Overpaying employees who may not report the overage
  • Rushing payment to employees

Conclusion

Even though it is becoming increasingly clear that businesses must pay more attention to the way they handle their bookkeeping, it also helps to be more aware of the potential issues that come with being negligent. Once you’re familiar with what can possibly happen if you keep being complacent with your books, you’ll be able to steer your efforts in the right direction and remain consistent until everything gets back on track! 

If you’re looking for a skilled expert on SMB bookkeeping in Australia, look no further because we’ve got you covered. Get in touch with us today to see how we can best serve your needs!

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