DIY Bookkeeping Mistakes Noted by Accountants:
The first mistake accountants across the board agree upon is using computer accounting software that is too complex for the user’s expertise. Let’s face it there is a plethora of accounting software on the market today and knowing what fits your needs as well as your expertise can be a difficult path to navigate. The best advice is to consult with an expert in the field of accounting software as they can evaluate your level of expertise and business needs to direct you to software that will fit you best.
The second mistake is not hiring a professional when you really need one. Medium and small business owners often fall into the trap of wanting to do everything to…. well save money. But the reality is no one can do everything and when you try to “do it all” something suffers. In business by and large it’s your bottom line the very thing you’re trying to preserve. It is difficult for some to delegate duties especially accounting as it is some of your most confidential information but when it’s done incorrectly the cost to you can be tremendous. With online accounting and the cloud the ease of outsourcing your accounting functions and the immediate availability to manage your finances anywhere at any time is an extremely appealing product. The security is comparable to that of the banking industry (which many of us have been doing online for years) and some say more secure. Of course, the cloud is not for everyone but it is one to consider when your knowledge in this area is not your strongest attribute to your business.
The third item I’d like to highlight is paying incorrect employee super contributions. Now if you read this and thought or said, “what’s that?” you need to outsource your payroll or hire a professional to do your payroll. Payroll is a complex system with a multiplicity of state and federal requirements. Many bookkeepers will tell you they’ve “done payroll” but you need to know what questions to ask to ensure they really understand the entire process not just processing payroll checks. The previously mentioned is a perfect example of a common mistake with regards to payroll; paying incorrect employee super contributions. This is the superannuation guarantee legislation where you, the employer, are mandated to pay 9.50% of an employee’s “ordinary time”. The confusion for many comes with understanding what constitutes ordinary time. Month end reconciliation process is another question you need to ask of the individual you are considering hiring. Like knowing what accounting software to purchase knowing what questions to ask a potential bookkeeper are crucial to ensuring they will meet your needs and provide effective, ethical record keeping for your business.
If you have questions regarding how to hire a bookkeeper, payroll or QuickBooks® software contact our office and let us see how we can help you navigate this complex overabundance of options and superhighway of internet information.