A new survey reveals how you can help your bookkeeper or accountant help you.
You might imagine that bookkeepers and accountants would view fixing up your mistakes as an easy way to make money, but they'd rather use that time to deliver higher-value services to you and their other clients.
According to a survey conducted for Intuit (the company behind QuickBooks Online) in association with Google, there are several things that small business owners get wrong.
More than 500 accountants and bookkeepers were surveyed, and the most common complaint – raised by 85 percent – was that people mix personal and business expenses.
Hint: if you need to pay a personal bill from your business bank account or using your business credit card, record it as an owner's drawing.
Tied in second place at 78 percent were poor record keeping and that clients have little understanding of how accounting works – and yes, we know that's why you pay an accountant or bookkeeper, but apart from any other considerations, you're the person who signs the tax return you need to understand where the numbers come from.
Poor record keeping can only be addressed if the owner resolves to do something about it. Modern accounting software makes the task easier than it used to be.
Ninety-three percent of respondents said they prefer all their small business clients to use accounting software, and 85 percent prefer to manage their clients' books remotely, which is most easily done via cloud-based accounting systems.
Such software increasingly includes the automated entry of bills and receipts (and when it doesn't, there are often add-ons to do this and other jobs), and integrating your calendar and accounts can make it easier to invoice customers promptly.
It may seem hard to believe, but 57 percent of accountants and bookkeepers said they have had small business clients that don't understand the importance of cash flow.
It's quite simple, really. You can make a paper profit by selling things for more than they cost you, but if you can't pay your debts when they fall due because your customers haven't paid you, then you're trading while insolvent, which is a very serious matter.
Finally, if you're a tradie, schedule some time to talk to your accountant or bookkeeper. 44 percent of them say tradies are the worst offenders when it comes to creating their own accounting problems. If you're doing it right, it'll be a short conversation. If not, finding out what you should be doing could save you money in the long run, and will probably give you a better view of how your business is performing.
Apart from anything else, modern accounting software usually makes it easy to issue invoices from your mobile phone as soon as you complete jobs, give clients the option of paying on the spot by credit card, and photograph the receipts or invoices when you pick up supplies.
Intuit's report is available here.